The economic recovery has strengthened in the recent months on the back of rapid progress in vaccinations, festive season and resultant increase in consumer and industry sentiments and the lead economic and business indicators have shown noteworthy improvement in October 2021 in this regard, according to Pradeep Multani, President, PHD Chamber of Commerce and Industry.
The PHDCCI Economy GPS Index for October 2021 has increased to 131 as compared to 113.1 for September 2021 (Base year 2018-19 = 100). The sequential growth of SENSEX (average of daily close) has increased by 2.8% from 58781 in September 2021 to 60422 in October 2021, PHDCCI said in a release here today.
The sequential growth of GST collections increased by 11.2% from Rs 1,17,010 crore in September 2021 to Rs 1,30,127 crore in October 2021. The sequential growth of passenger vehicles increased by 62.5% in October 2021 from 160070 units in September 2021 to 260067 units in October 2021, said Mr. Pradeep Multani.
Though passenger vehicle sales have increased sequentially on the back of high festive demand, however, shortages of raw material, high input prices, among others, are impacting the production possibilities and anticipated sales volumes, said Multani.
The PHDCCI Economy GPS Index during the period April–October of FY 2021-22 stands at 114.8 as compared to 78.7 for April–October FY 2020-2021. The PHDCCI Economy GPS Index at 131 for October 2021 is higher by 21.3 points from the Economy GPS Index for October 2020 at 109.6, Multani said.
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 and 131 for October 2021 as compared with 109.6 for October 2020.
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, Multani said.
More and more direct benefit transfers needs to 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, Multani further said.
PHD Chamber of Commerce and Industry (PHDCCI) Economy GPS Index is a composite index of 3 lead economic and business indicators with base year at 2018-19=100, which measures the broad economic and business activity. The PHDCCI Economy GPS Index, based on the monthly values of three high frequency indicators viz., GST collection (Rs. Crore), Passenger Vehicle Sales (units) and SENSEX (daily average), helps to find the direction of the economy.
The three broad indicators are representing not only demand and supply in the economy but also revenue growth of the government and movement of financial markets in the country. GST collections indicate the momentum of business activity, passenger vehicle sales is broad indicator of demand activity in the economy and movement of SENSEX indicate mood of both domestic and foreign investors.
