1. RBI Looks At Health For Wealth
RBI provides Rs 50,000-crore liquidity for extending Covid-19 loans to healthcare. Under this scheme, banks can provide fresh lending support to vaccine manufacturers, hospitals and also patients for treatment. Also incentivized for quick delivery of credit under the scheme through extension of priority sector classification up to March 31, 2022. loans will continue to be classified under the priority sector till repayment or maturity, whichever is earlier
RBI governor has taken the financial sector battle against Covid 2.0 head on with a clear focus on protecting lives and livelihoods. Banks to park their surplus liquidity up to the size of the Covid loan book under the reverse repo window at a rate which is 40 bps higher than the reverse repo rate .
2. Manufacturing PMI Update
ndia Manufacturing PMI recorded 55.5 in April after declining to a seven-month low of 55.4 in the month prior. Remaining flat-to-positive, the index remained above its long-run average of 53.6. The manufacturing sector remained surprisingly favorable amidst intensification of the viral virus.
The manufacturing index in its current avatar strikes a delicate balance between dampening domestic demand (low output, sales) and exponential exports (~200% Apr’21 growth). Key risks are visible in the possible imbalance between rising global prices and domestic case counts. Widening of vaccination programs to play hero in times to come.
3. Services PMI Update
India Services PMI recorded 54.0 in April vs 54.6 in the month prior, touching its lowest levels in calendar year 2021. The services sector remained surprisingly favorable amidst intensification of the viral virus. Latency via unforeseen developments can disrupt demand footprints, as gap between input price inflation and charges stands at its widest since the global financial crisis.
The services index in its current avatar strikes a delicate balance between today’s promises and tomorrow’s worries, as if reflected by rising new work arching against subdued optimism. As is seen globally, manufacturing PMI continues to out-perform its services counterpart, courtesy of the latter being hit harder by Covid-19.
4. The Rain’s Here To Wash Away The Pain
Despite admitting to price pressures both from food items and input prices, a normal Southwest monsoon will have a “soothing impact” on inflation pressures and ruled out any wide variations in medium-term inflation forecast from what was given in April.
Overall outlook for the economy is highly uncertain and is clouded with downside risks. Inflation trajectory over the rest of the year will be shaped by the pandemic infections and the impact of localised containment measures on supply chains and logistics.
5. G20 Meet & Greet Gives India A Positive Report Card
Economic Multilateralism and National Capacity Building will help nations recover from covid disruptions. Export and Demography prowess coupled with like-minded policies and practices can make India the hotspot for investments the world-over, thus kick-starting a global recovery from home.
Coming out of trouble bubble has boosted India’s efforts to become the supreme everything-maker as much as it has set back its abilities to do so. In expedition of New Normal, the country is quick to adapting and improvising on current challenges to make them future opportunities for growth.
