Economy shows signs of picking up momentum: Subhash Chandra Garg
1 min read 03 Jun 2019, 08:42 PM ISTGarg says a turnaround in demand and financing condition in the market is beginning to happen on a strong noteNational Statistics Office data shows that economy had grown at 6.8% in FY19, slower than the 7.2% in FY18
PremiumNEW DELHI : Indian economy, which expanded at 5.8%, its slowest pace in five years in the March quarter of FY19, is now showing sure signs of gathering momentum, said a government official.
Subhash Chandra Garg, secretary in the department of economic affairs, which prepares the union budget, said on Monday in a Twitter post that a turnaround in demand and financing condition in the market is beginning to happen on a strong note.
Garg’s expression of confidence is partly founded on an improvement in manufacturing performance in May going by a monthly survey of 400 industrial companies. The Nikkei India Manufacturing PMI improved to 52.7 in
May from 51.8 in April, pointing to the strongest improvement in the health of the sector in three months. “A revival in new order growth promoted a faster upturn in manufacturing production, as Indian firms sought to replenish inventories utilised in May to fulfil strengthening demand," said Pollyanna De Lima, Principal Economist at IHS Markit and author of the report.
“Crude is moving towards US$ 60. Government bond yield has gone below 7%. Spread for non banking finance companies/ housing finance companies over government bond is narrowing. Rupee is firmly below 70. Sure signs of coming high growth," Garg said in his tweet.
Data released by the National Statistics Office on 31 May showed that economy had grown at 6.8% in FY19, slower than the 7.2% in FY18 but pointed to some silver lines—manufacturing output and construction activities expanding faster in the just concluded financial year from the year ago period.
Easing liquidity conditions will come as a relief to the industry, especially the real estate sector starved of funds. Industry executives on Monday sought lower interest rates, tax cuts and bold reforms in land and labour in a blueprint prepared to help the Narendra Modi administration revive economic growth.
Vikram Kirloskar, chairman and managing director of Kirloskar Systems Ltd and president of industry chamber Confederation of Indian Industry (CII), said at a briefing that sharpening the competitiveness of businesses was key to overcoming the risks to economic growth such as protectionist trends in global trade, tighter liquidity conditions at home and abroad and volatile oil prices. The industry lobby group expects the Indian economy to expand at 7-7.4% in FY20.
