Finally good news for Indian Economy

Economy : There is good news for the Indian economy. Production activities picked up in July after falling in June. The key index related to this reached a three-month high. Due to the lockdown, the IHS Market Purchasing Managers Index (PMI) had declined in the previous month i.e. June. The IHS Market Purchasing Managers Index fell to 48.1 in June, but improved to 55.3 the following month.

An index above 50 means growth, while a fall below degrowth means a decline in production activities. Production activity in June fell for the first time in 11 months. An increase in PMI confirms improvement in other economic sectors as well. As in July, the Goods and Services Tax (GST) collection stood at Rs 1,16,393 crore.

In June, the GST collection had come down from Rs 1 lakh crore to Rs 92,849 crore for the first time in the last eight months. Pauliana de Lima, Associate Director - Economics, IHS Markit, says, “The production boom next month, after the fall in June, is encouraging.

With the reduction in the strictness of lockdown in many places, the production of one-third of the companies has jumped on a monthly basis due to the arrival of new orders. Production in the manufacturing sector increased in July due to increased demand and easing of lockdown restrictions. Their total order book has increased due to increased demand from abroad. After a slight decline in demand in foreign markets in June, they have increased significantly in July.

Polyana says that if there is a steady reduction in infections, the industrial production rate can reach 9.7% in this calendar year. According to him, the increase in new orders and export output coupled with increase in purchase data and input stock has created panic in the job market. The round of layoffs that has been going on for 15 months has ended in July.