India on the Road to Exit Recession

Out of 8 indicators tracked by Bloomberg News, 5 indicators have been steady, 2 indicators posted growth and 1 indicator deteriorated in the month of January. According to the survey the indices for the consumer activity and industrial activity in the economy have increased by 11.4% and 1% respectively. In the third quarter of the current fiscal year, the gross domestic product (GDP) has expanded by 0.5% in comparison to the last year. As per RBI data, the credit growth in the economy during the period was 6.5%. The Markit India Purchasing Managers’ Composite Index (PMI) has risen to 52.8. This clearly indicates that the Indian economy has exited the recessionary phase and transitioned to the growth phase.

The improvement in the indices for consumer activities as well as the industrial activities is the most significant for the economy as it will result in increased consumer confidence leading to a positive sentiment and environment in the economy as whole. If the consumer confidence continues to improve for a few more months, it is expected that the private investment in the economy will pick up which will result in more employment opportunities. This will further improve the overall confidence in the economy.

Rajeev Upadhyay

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