Opinion | Green shoots are at risk of the big crisis in China
Signs of a recovery from India’s economic slump are too raw to celebrate. Several business sectors are also vulnerable to disruption caused by China’s crisis. We must stay on guard
As India seeks to recover its economic verve, Nirmala Sitharaman has sought to assure everyone that there is reason to be optimistic. The finance minister told lawmakers in Parliament this week that “green shoots" are starting to emerge, and that the economy’s troubles may soon be a thing of the past. Among the signs of promise sighted, she cited a recent rise in India’s foreign exchange reserves, an uptick in goods and services tax (GST) revenue, stronger inflows of foreign direct investment, an expansion in factory output, and a buoyant market for stocks. Of these indicators, a revival in the government’s GST intake would be the only one that reliably offers relief on the near-term outlook, but that too only if January’s figure of ₹1.1 trillion can be beaten month after month. Meanwhile, other numbers look too weak for us to count on a rebound just yet. Car sales, for instance, are refusing to bottom out. They fell 6% last month in comparison with the previous year. Lending remains anaemic, idle capacity persists at far too many factories, and stress within the financial sector hasn’t eased enough. Even industrial production fell 0.3% in December from a year earlier. In all, there isn’t much cause for cheer.