The animal spirits are coming back to lift India out of the dejection of hopelessness
The Deepavali crackers whooshing, spinning and bursting seemed to belie the overall gloom of an erosion of economic well-being in India—not only is there money with people, there is money to celebrate. Data from the Reserve Bank of India (RBI) on household savings is saying something similar—household savings more than doubled in the first quarter this year against last year (read RBI bulletin for November here.) Indicators on manufacturing and services are doing better, goods and services tax collections hit the psychologically important ₹1 trillion mark in October. Companies have tightened belts and data shows that while the top-line is down just over 9% for listed non-finance firms, profit after tax is up a huge 41% July to September (read here). The stock market is on a liquidity plus sentiment fuelled rush, shaking off the March’s fear-fuelled crash, and is now at a lifetime high, gaining almost 70% from the year’s low. The balance of payments is looking good. Exports are picking up. Business sentiment is perking. The bounceback looks real.