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July’s purchasing managers’ index reading for India’s manufacturing sector strikes an optimistic note. From June’s 48.1, the index bounced up last month to 55.3, zipping past the 50 mark that separates expansion from contraction. Stronger demand both at home and overseas underpinned this performance. The easing of restrictions as the second wave of covid abated is mainly to thank. Also, our manufacturers hired more workers, as reported, snapping a run of 15 successive months of employment reduction.

Encouragingly, there have been some other indicators as well that have pointed to a gain in economic momentum. Our goods and services tax mop-up, for example, surged to 1.16 trillion in July from 92,849 crore in June. Also, steel prices in India have been firm, thanks in part to infrastructure demand. These have added to evidence that our economy is now on the mend. It’s still early, however, to say how sustainable this recovery will prove. With just about a tenth of all adults in the country vaccinated so far, vulnerability to a third wave remains high. Hopefully, past lessons will help us manage any upshoot of infections better and keep economic disruptions to a minimum.

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