Economy's Inflection Point

The Indian Economy faces a pivotal moment. A post-pandemic bounce is visible. But there are headwinds on the horizon as well.

- Minhaz Merchant

Key economic indicators are up: exports, foreign direct investment (FDI), Purchasing Managers Index (PMI), Index of Industrial Production (IIP), GST, direct tax revenue and corporate profits.

The Production-Linked Incentive (PLI) scheme has been embraced by domestic and international companies. It now extends to over a dozen sectors.

Indian startups are attracting big-ticket investment from foreign funds. India is rapidly becoming a global leader in fintech, edtech and SaaS (software as a service). The transformation to digital and cloud, catalysed by structural changes in the way international companies operate in a post-Covid environment, could prove another Y2K moment for Indian infotech companies.

Consumer confidence too is returning. So is hiring. The usually circumspect Mahesh Vyas, Managing Director of Centre for Monitoring Indian Economy (CMIE), conceded in his Business Standard column on October 12, 2021: “An optimism of sorts is in the air. Perhaps it is a reflection of an economic turnaround. Recent data suggests that the economy is reviving. Tax collections, foreign trade, electricity generation have all been convincingly and consistently buoyant so far in this fiscal year. Employment conditions and consumer sentiments also improved dramatically in September.