The Signal (weekly highlights)

1. Moody’s changes India’s rating outlook to stable from negative

The decision to change the outlook to stable reflects Moody’s view that the downside risks between the real economy and financial system are receding. With higher capital cushions and greater liquidity, banks and non-bank financial institutions pose much lesser risk to the sovereign than Moody’s previously anticipated

The affirmation of the Baa3 ratings balances India’s key credit strengths, which include a large and diversified economy with high growth potential, a relatively strong external position, and a stable domestic financing base for government debt, against its principal credit challenges, including low per capita incomes, high general government debt, low debt affordability, and more limited government effectiveness.

2. India’s services sector activity expands in September

The seasonally adjusted India Services Business Activity Index fell from 56.7 in August to 55.2 in September, but remained well above its long-run average.

India’s services sector activity continued to expand in September, supported by favorable underlying demand amid the easing of COVID-19 restrictions, but lost some momentum from August’s 18-month high level

3. GST collections rise 23% to Rs 1.17 lakh crore in September

Gross goods and services tax (GST) collections came in at Rs 1.17 lakh crore in September, up 23% on year and 4.5% on month

The average monthly gross GST collection for the second quarter of the current financial year has been Rs 1.15 lakh crore, which is 5% higher than the average monthly collection of Rs 1.1 lakh crore in the first quarter of the year

4. Cabinet gives nod for seven new textile parks with Rs 4,445 crore outlay

The cabinet on Wednesday approved the setting up of seven mega integrated textile regions and apparel parks or PM MITRA with an aim to create more jobs, attract investment and make domestic industries competitive. The estimated expenditure will be Rs 4,445 crore over a period of five years

The move aims to create direct employment for seven lakh people and indirect employment for 14 lakh people. For this, 10 states have shown their interest, seven parks will be set up in the states where there will be more facilities, cheap electricity, cheap land etc

5. Employment rises by 8.5 million in September; at highest level in 20 months

 Labor force participation rate increased from 40.5% in August to 40.7% in September and, importantly, the employment rate inched up from 37.2% to 37.9% in September this year.

The salaried job market has witnessed high growth in the month of September as the festive season nears and given the large size of retail trade a further increase in employment can be expected.