Lead economic indicators have shown an uptick for the second consecutive month in June 2021, thereby indicating that economic recovery has begun once again, according to Mr Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry.
Out of the 10 lead economic and business indicators of QET (Quick Economic Trends), tracked by the industry body PHDCCI, six have shown uptrend in the growth for the month of June 2021 as compared with five showing the uptrend in May 2021, Aggarwal said in a statement here.
E way bill, Exports, Passenger Vehicle Sales, Unemployment Rate, Forex Reserves and Stock Market have registered sequential growth in June 2021 as compared to May 2021, the PHDCCI President added.
Passenger vehicles have shown the highest growth of 190.4% in June 2021 over the previous month of May 2021, followed by e-way bills with growth of 36.8%, unemployment rate with improvement of 22.9%, among others, Mr Aggarwal said.
However, four indicators including GST collections, railway freight, exchange rate and manufacturing PMI have registered a decline in June 2021 over May 2021, he disclosed.
Sequential growth of GST collections decreased by (-)9.6% from Rs. 1,02,709 crore in May 2021 to Rs. 92,849 crore in June 2021. Exchange rate recorded a depreciation of (-)0.5% from 73.2 INR/USD in May 2021 to 73.54 in June 2021. The manufacturing PMI contracted by (-)5.3% from 50.8 in May 2021 to 48.1 in June 2021, while railway freight declined by (-)1.8% from 114.8 MT in May 2021 to 112.7 MT in June 2021, the PHDCCI President said.
With significant decline in the new cases of 2nd wave of Coronavirus in the country, various States have lifted partial/complete lockdowns, thus paving way for re-start of economic recovery, Mr Aggarwal added.
The significant pick up in the economic activity was observed from October 2020 which peaked in January 2021 and started declining from February 2021, while improving again since May 2021, he disclosed.
At this juncture, to re-build for the high growth trajectory, the Centre should frontload the National Infra Pipeline expenditure as private investment are not coming in shorter period. The increased spending on infrastructure will give a multiplier effect to rejuvenate the aggregate demand in the economy. Undoubtedly, robust growth of infrastructure is the key ingredient to realize the vision of Aatmanirbhar Bharat, said Aggarwal.
It would be prudent to do away with the custom duties on the imports of primary raw materials for industrial use for at least current FY 2022 and impose export duties on various primary commodities showing huge price increases, exceeding 50% over the last FY 2021, Mr Aggarwal opined.
More and more direct transfer benefits should be considered for the urban and rural poor under the various welfare schemes in addition to the free distribution of dry rations till Diwali as already announced by the Prime Minister, he said.
He said the Government should have a target to vaccinate at least half of the population in next 2-3 months, i.e. by September 2021.
10 economic and business indicators of QET include demand and supply indicators along with external and financial sectors indicators, Mr Aggarwal said.
