Increasing Cover of Lockdown to Affect Economy Adversely

The following graphs clearly indicate that there is another wave of coronavirus in India. The battle which India had almost won by flattening the corona curve is now again at our doors. Across states and cities citizens and the state governments as well as the administrations are not serious enough about it. Now across the country the most effective tool and weapon against the COVID19 outbreak is the social distancing but it seems to be a thing of past for the most. Most of the people are now completely relying COVID19 Vaccine but it is too early. Until and unless more than half of the population is vaccinated, complete dependence on vaccine would be risky proportion.

Indian Economy on the Path of Expansion

The blanket lockdown of the whole India by the Government of India in response to the COVID19 pandemic has given a never seen before shock to the Indian economy. However, different economic indicators started indicating the revival of economic activities post gradual relaxations granted in the lockdown since May 2020 by different states. However for more than two quarters, things remained very difficult for the economy. Considering the fall in the aggregated demand in the economy, the government was forced to suspend the Insolvency and Bankruptcy Code (IBC) so that individuals and businesses could get enough time and space to adjust in the post pandemic recession and the events of defaults could be avoided. This single decision has been very helpful for the whole banking sector. Although it has adversely impacted the revenues of the banking sector but has been very helpful in dealing with the non-performing assets (NPA).

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Inflation Spikes in February

Inflation is rising. Both the retail inflation as well as the core inflation has spiked to 5.03% and 5.7 in the month of February 2020 in the economy in comparison to the month of January while Index for Industrial Production (IIP) has contracted 1.6% during the same period. This spike in the inflation can partly be attributed to the small base but it is largely due to cost push pressures in the economy. Most importantly the inflation is not expected to moderate significantly besides the base effect until and unless the government decides to cut the taxes on fuel.

IDBI out of PCA Framework

In its recent notification, the Reserve Bank of India (RBI) has taken IDBI bank out of the Prompt Corrective Action (PCA) framework. This is good news for the banking sector in general. It clearly means that the financial position of IDBI bank has improved enough to be taken out of the PCA framework. A bank is put under the PCA framework of RBI on the basis of three parameters namely capital to risk weighted assets ratio (CRAR), net non-performing assets (NPA) and Return on Assets (RoA). When these key ratios fall below the trigger points As per the RBI press release, for the quarter ending on 31st December 2020, the bank has been found to be not in breach of the PCA parameters on regulatory capital, net NPA and leverage ratio.

Reservation in Private Jobs

From the experiences of India with the reservation for more than seven decades, it is now well established but never acknowledged fact (to remain politically correct) that reservation has some positive impact but in a very limited way. Even after more than 70 years of its implementations, it has not been able to achieve the stated goals of making an equal society. Rather it has widened the slits in the society and perhaps caste has become more prominent than ever!

There have been demands for reservation in the private sector by the political class (caste based) on the basis of caste to appease its constituencies since long. Similarly there also have been demands for reservation to locals in employment mainly backed regional or state level parties like Shivsena. Shivsena even had mobilized a massive movement for the same decades back. However neither society nor the government ever found this demand to be genuine enough to ponder about.

Coordinated Efforts Needed to Reduce Petroleum Prices

This increase in oil prices has a multifaceted negative impact on the economy. It will not only adversely affect the inflation in the economy but the governments’ revenues in the medium to long term also by hurting the individuals’ capacity to spend (as a large portion of their income will be spent towards the oil component of the expenditure basket).

The increasing prices of petroleum products will elevate the inflation in the economy from two sides. It should be noted that crude petroleum is a constituent of the consumer price index (CPI) basket so any increase in the oil prices is bound to directly push the inflation upwards. On the other hand, indirectly, the transportation cost is dependent on the prices of the petroleum products. It has been predicted in many reports that the oil prices in the international market are expected to rise in coming months. Considering the situation, it is certain that inflation in coming months will elevate.

भारतीय अर्थव्यवस्था मंदी के चक्र से बाहर

ब्लूमबर्ग न्यूज द्वारा जनवरी महीने के लिए ट्रैक किए गए 8 संकेतकों में से 5 संकेतक स्थिर रहे हैं, 2 संकेतकों में वृद्धि और 1 संकेतक में गिरावट दर्ज किया है। सर्वेक्षण के अनुसार अर्थव्यवस्था में उपभोक्ता गतिविधियों और औद्योगिक गतिविधियों के सूचकांक में क्रमशः 11.4% और 1% की वृद्धि हुई है। चालू वित्त वर्ष की तीसरी तिमाही में सकल घरेलू उत्पाद (जीडीपी) में पिछले वर्ष की तुलना में 0.5% का विस्तार हुआ है। रिजर्व बैंक ऑफ इण्डिया RBI के आंकड़ों के अनुसार, दिसम्बर के महीने में अर्थव्यवस्था में ऋण की वृद्धि दर 6% से अधिक रही थी। इससे पहले लगातार छः महीने में यह वृद्धि दर 6% से कम रही है। द मार्किट इंडिया परचेजिंग मैनेजर्स कम्पोजिट इंडेक्स (पीएमआई) 52.8 पर पहुंच गया है। यह स्पष्ट रूप से इंगित करता है कि भारतीय अर्थव्यवस्था मंदी के दौर से बाहर निकलकर विकास के चरण में प्रवेश कर चुकी है।

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.

आर्थिक गतिविधियां पूर्व-महामारी के स्तर पर वापस

आर्थिक गतिविधियों के लिए सूचकांक के साथ गतिशीलता, बिजली की खपत और श्रम भागीदारी जैसे उच्च आवृत्ति संकेतक बताते हैं कि भारतीय अर्थव्यवस्था पूर्व-कोविद के स्तरों से लगभग सिर्फ 1.9% नीचे ही रह गई है। आर्थिक गतिविधियों में सुधार को देखते हुआ कहा जा सकता है अर्थव्यवस्था तेजी से रिकवरी के ट्रैक पर है। इन उच्च आवृत्ति वाले आर्थिक संकेतकों में पिछले छह महीने से अधिक समय से लगातार सुधार हो रहा है। PMI के साथ-साथ IIP भी ऊपर की ओर बढ़ता हुआ दिखाई दे रहा है परन्तु गतिशीलता और श्रम भागीदारी जैसे संकेतकों में अभी भी सुधार दर्ज नहीं किया जा रहा है। गतिशीलता और श्रम भागीदारी के संकेतकों को पूर्व-महामारी स्तरों को प्राप्त करने में अभी और समय लगेगा।

अंतर्राष्ट्रीय मातृभाषा दिवस

आज अंतर्राष्ट्रीय मातृभाषा दिवस है। मतलब अबतक की चली आ रही परंपरा के अनुसार एक इवेंट। सालगिरह टाइप का! यदि इसे इवेंटनुमा तरीक़े से देखा जाए तो बधाई तो बनती ही है। मतलब कुछ 'हार्दिक बधाई' या 'हार्दिक शुभकामना' जैसे परंपरागत परन्तु पॉप्युलर (शायद थोड़े प्रोग्रेसिव भी) जूमलों को आसमान में तो उछाला जाना ही चाहिए। और इस तरह इस वार्षिक इवेंट का इतिश्री रेवा खण्डे समाप्तः; बिल्कुल हिन्दी दिवस व पखवाड़े की तरह! वैसे इन जूमलों से कुछ हो ना हो परन्तु थोड़ी जनजागृति व थोड़ा माहौल तो बन ही जाता है और माहौल का अपना ही अंतर्निहित सुख होता है! शायद स्वार्गिक!