The uptrend in the lead economic and business indicators in the recent months shows that the economic recovery is catching pace and strong economic growth is expected in the coming quarters, according to Pradeep Multani, President, PHD Chamber of Commerce and Industry.
Out of the 12 lead economic and business indicators of QET (Quick Economic Trends), tracked by the industry body PHDCCI, nine have shown uptick in the sequential growth for the month of September 2021 as compared with six showing the uptrend in August 2021, Multani said in a statement here today.
GST collections, stock market, UPI transactions, exports, exchange rate, forex reserves, CPI inflation, WPI inflation and unemployment rate have registered positive sequential growth in September 2021 as compared to August 2021, the statement said.
Unemployment scenario improved to 6.9% in September 2021 from 8.3% in August 2021. Stock Market (SENSEX -average of daily close) have recorded the sequential growth of 6.4% from 55238 in August 2021 to 58781 in September 2021.
GST collections registered the sequential growth of 4.5% from Rs 1,12,020 crore in August 2021 to Rs 1,17,010 crore in September 2021. Number of UPI transactions increased sequentially by 2.8% from 3.6 billion in August 2021 to 3.7 billion in September 2021, Multani said.
Exports increased by 1.5% from US$ 33.3 billion in August 2021 to US$ 33.4 billion in September 2021. Exchange rate appreciated by 0.8% from monthly average of 74.17 INR/USD in August 2021 to 73.58 INR/USD in September 2021. Forex reserves registered the sequential growth of 0.5%, increasing from US$ 634 billion in August 2021 to US$ 637 billion in September 2021. WPI inflation declined to 10.7% in September 2021 from 11.4% in August 2021. CPI inflation also decreased to 4.4% in September 2021 from 5.3% in August 2021, Multani added.
However, railway freight registered the sequential decline of (-)4.1%, decreasing from 110.5 MT in August 2021 to 106 MT in September 2021. The sequential growth of passenger vehicles declined by (-)20.1% in September 2021 from 232224 units in August 2021 to 185636 units in September 2021. Trade deficit increased sequentially by 64.3% from US$ 14 billion in August 2021 to US$ 23 billion in September 2021, the PHDCCI President said.
Supply side issues such as high input prices, shortages of raw material, among others are impacting the production possibilities and reducing the price cost margins of the businesses, Multani said.
After showing an increasing trend from October 2020 and peaking in January 2021, economy out of 12 based on PHDCCI Quick Economic Trends started declining from February 2021. The same started increasing from May 2021, peaked in July 2021, declined in August 2021 and again picked-up in September 2021.
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 said.
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, he added.
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 opined.
