Economic activity for the month of December 2021 has been recorded at the highest level during the year as the Economy GPS Index of PHDCCI went up at 127.7, supported by the growth of passenger vehicle sales, according to Industry Body, PHD Chamber of Commerce and Industry.
Going ahead, there is a need for continuous handholding by the Government amid the rising uncertainty caused by new Coronavirus variant-omicron and rapid rise in the Coronavirus cases in the last few days, said Pradeep Multani, President, PHD Chamber of Commerce and Industry in a statement here.
“We are confident that with the support of government, the economic activity would continuously move ahead to attain a higher economic growth trajectory in 2021-22, said Multani.
PHDCCI Economy GPS Index captures the momentum in supply side business activity through growth in GST collections, demand side consumer behaviour through volume growth in passenger vehicle sales and sensitivity of policy reforms and impact of domestic and international economic and business environment through the movement of SENSEX at the base year of 2018-19=100, said the Industry Body.
Sequentially, the PHDCCI Economy GPS Index for December 2021 has increased to 127.7 as compared to 125.2 for November 2021. Passenger vehicles recorded a sequential growth of 18.3%, increasing from 2,15,626 units in November 2021 to 2,55,000 units in December 2021.
However, the sequential growth of GST collections has decreased by (-)1.3% from Rs. 131,526 crore in November 2021 to Rs. 129,780 crore in December 2021. The sequential growth of SENSEX (average of daily close) has decreased by (-)3.0% in December 2021 from 59416 in November 2021 to 57663 in December 2021, Multani added.
The PHDCCI Economy GPS Index during the period April–December of FY 2021-22 stands at 117, which is 31.2 points higher than April–December FY 2020-2021 period index of 85.8, said Multani.
The PHDCCI Economy GPS Index at 127.7 for December 2021 is higher by 13 points from the Economy GPS Index for December 2020 at 114.8, Multani added.
PHDCCI Economy GPS Index has shown sharp recovery from the lows of 39.6 for April 2020 to 124.3 for April 2021, 91.5 for May 2021 as compared with 50.1 for May 2020, 107.5 for June 2021 as compared with 75.1 for June 2020, 119.7 for July 2021 as compared with 85.6 for July 2020, 116.7 for August 2021 as compared with 90.5 for August 2020, 113.1 for September 2021 as compared with 100.2 for September 2020, 127.0 for October 2021 as compared with 109.6 for October 2020, 125.2 for November 2021 as compared with 106.9 for November 2020 and 127.7 for December 2021 as compared with 114.8 for December 2020.
Though passenger vehicle sales have increased sequentially, however, shortages of raw material, high input prices, among others, are impacting the production possibilities and anticipated sales volumes. At this juncture, there is a need to address the high commodity prices and shortages of raw material to support the consumption and private investments in the country, Multani opined.
The drivers of household consumption needs to be further strengthened to enhance the aggregate demand as it will have an accelerated effect on expansion of capital investments, PHDCCI President suggested.
More and more direct benefit transfers needs to be enhanced for the urban and rural poor under the various welfare schemes of the Government to strengthen and sustain the recovery in the economic growth. Mitigation of the pandemic impact with effective adoption of COVID appropriate behaviour and protocols is need of the hour, Multani said.
