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Govt notices acceleration in economic indicators

Published: Jun 23, 2020

By TIOLCORPLAWS News Service

NEW DELHI, JUNE 23, 2020: Guided by the urgent need to save lives -‘Jaan hai toh Jahan hai', India resorted to a strict 21 days nationwide lockdown on 24th March, 2020 to contain the spread of COVID-19 in its early stages in the country. The lockdown period gave a respite to ramp up the health and testing infrastructure in the country. Due to timely tracing, treatment and reporting, the number of people recovering from the virus is continuously rising and the active cases, as on date, are 41% of the total cases in the country.

The strict lockdown and social distancing measures, however, adversely affected the economy. With a gradual shift in strategy towards saving lives as well as livelihoods- ‘Jaanbhi Jahan bhi', India has entered the "Unlock India" phase from June 1 with phased resumption of services and businesses. The Government and the RBI have taken prompt policy measures - both short term and long term - in a calibrated manner to reinvigorate the economy at the earliest with minimal damage.

Agricultural sector remains the foundation of the Indian economy and with a forecast of a normal monsoon, should support the rebooting of the Indian Economy. Though the GDP contribution of the sector may not be very large (in relation to Industry and Services), its growth has a very positive impact on the large population dependent on agriculture. Further, the recent landmark reforms announced in the sector will go a long way in building efficient value chains and ensuring better returns for farmers.

The resilience of the Indian manufacturing is evident from the fact that within a period of 2 months, India has become the world's second largest manufacturer of Personal Protective Equipment (PPE) starting from scratch. Early green shoots of economic revival have also emerged in May and June with real activity indicators like electricity and fuel consumption, inter and intra-state movement of goods, retail financial transactions witnessing pick up.

Improvement in Economic Indicators

Agriculture

• Procurement of wheat from farmers by Government agencies has touched an all-time record figure of 382 Lakh Metric Tonnes (LMT) on 16 th June, 2020 surpassing the earlier record of 381.48 LMT achieved during 2012-13. This has been accomplished during the trying times of Covid-19 pandemic under the social distancing restrictions. 42 Lakh farmers have been benefitted and a total amount of about Rs. 73,500 crore has been paid to them towards Minimum Support Price (MSP) for wheat.
• The procurement of Minor Forest Produces (MFP) under the MSP for MFP Scheme in 16 states has hit a record-breaking high with the procurement touching Rs. 79.42 crores. This has proved to be a much needed panacea in these distressing times of Covid-19 pandemic, which has disrupted lives and livelihoods of tribals.
• As on 19 th June, farmers have sown 13.13 million hectares of Kharif crops , 39 per cent higher than corresponding period of last year with a big jump in area coverage under Oil seeds, Course Cereals, Pulses and Cotton.
• Fertilizer sales have surged by almost 98 per cent year-on-year in May 2020(40.02 lakh tonnes), reflecting a robust agricultural sector.

Manufacturing

• India's PMI Manufacturing and Services showed lower contraction in May at 30.8 and 12.6 respectively over April (27.4 and 5.4 respectively).
• Electricity consumption saw lower contractionin growth rates from (-) 24 per cent in April to (-) 15.2 per cent in May to (-)12.5 per cent in June (till 21 st June). In June, electricity consumption has continuously improved from (-)19.8 per cent in the first week to (-)11.2 per cent in the second week to (-)6.2 per cent in third week of June.
• Total assessable value of E-Way bills picked up by a massive 130 per cent in May 2020 (Rs. 8.98 lakh crore) compared to April 2020 (Rs. 3.9 lakh crore), though lower than previous year and pre-lockdown levels. Value of E-Way bills generated between 1 st and 19 th June stood at Rs. 7.7 lakh crore, with 11 days left for the month to complete.
• Consumption of petroleum products, a major indicator reflecting consumption and manufacturing activity in the countryincreased by 47 per cent from 99,37,000 metric tonnes in April to 1,46,46,000 metric tonnes in May.Consequently, year-on-year contraction in consumption growth of petroleum products was much smaller at (-)23.2 per cent in May against (-)45.7 per cent in April. In June, growth in consumption of petroleum products is expected to be still higher after one month of Unlock 1.0.

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