Nov data add heft to revival

New Delhi: India’s economic turnaround narrative was bolstered by November data for goods and services tax (GST) collections, passenger car sales, the Purchasing Managers’ Index (PMI) for manufacturing, railway freight loading and the Nomura India Business Resumption Index (NIBRI).If this momentum is sustained, India could return to growth in the March quarter, economists said, urging the government to provide more fiscal stimulus to sustain demand. “November was a busier month than October,” said Nomura economists Sonal Varma and Aurodeep Nandi. The Centre needs to step up on the expenditure front, economists said. “The government should start spending now, else the recovery made so far can well taper out toward the last month of the third quarter,” said EY chief policy advisor DK Srivastava. Consumption and capital expenditure should be driven by the government, he said. The government’s total expenditure was up just 0.4% in the first seven months of the current fiscal year. GST collections crossed ₹1 lakh crore for a second month, rising to ₹1.04 lakh crore from ₹1.03 lakh crore a year ago but down slightly from ₹1.05 lakh crore in October.79521731Strong Investment SentimentThe Nomura index touched a post-lockdown high of 89.2 for the week ended November 29 from 88.7 in the preceding week, riding a recovery in power demand and employment.Passenger car sales were up for the fourth successive month in November, rising 8.6% from a year ago to 286,000 units, according to industry estimates, though lower than record numbers in October.Manufacturing PMI eased to 56.3 in November from a 12-year high of 58.9 in October but remained firmly in the expansion zone. A reading over 50 on this survey-based index shows expansion.Freight loaded by the Indian Railways in November stood at 109.83 million tonnes, higher than 108 million tonnes in October, continuing the trend of sequential growth. November loading was 9% up from the year earlier, according to Indian Railways data.“The Indian growth story continues to expand as is demonstrated by the trends in FPI, FDI and corporate bond market flows that indicate and underline the beliefs of investors in the strength and resilience of Indian economy,” the finance ministry said on Tuesday in a statement on foreign capital flows.Investment sentiment has been buoyed by the frequent and active intervention of the government, it said.FDI, FPI FlowsFDI in the April-September period rose 15% from a year ago to $30 billion, FPI was at a monthly record of ₹62,782 crore in November and corporate bond issuances were up 25% to ₹4.43 lakh crore in the first half of FY21, the finance ministry said.“The numbers indicate that the economy is on a reasonably stable upward path,” said HDFC Bank chief economist Abheek Barua.This follows better-than-expected July-September gross domestic product (GDP) numbers. The economy contracted 7.5% in the period, recovering from a 23.9% decline in the first quarter.ET had reported Monday that most experts now expect the economy to contract at a lower rate in FY21 than estimated earlier, with the second-quarter trend continuing in the third quarter so far.

from Economic Times https://ift.tt/3ojmThz