Revival on the cards for Indian economy

Even as India’s economy continues to grow at a healthy pace — an above 7 per cent score is on the cards — of late, there has been some debate on the underlying momentum.

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This is on account of the report cards of some companies in the consumer goods space. Their performance is being said to reflect “urban stress”. Even if that is taken into account, several economic indicators appear positive. The GDP data will be released later this week.The purchasing managers index for both services and manufacturing has been in the region of 57-60 for the last three months. Any number above 50 is positive, and the average so far this year is above 60 for the composite index — the highest in the last five years. Alongside, GST collections in the first seven months of the year have topped at Rs 12.74 lakh crore. This is higher than last year’s tally of Rs 11.64 lakh crore. Two-wheeler sales have risen by 16 per cent for the first seven months of the year. Passenger car sales had slowed down in September over August but rose by 9 per cent in October when the festival season began.The lament of some companies on subdued consumption could be attributed to the “shradh” period when believers desist from buying consumer goods as part of their practice of abstention. This manifested in low sales of automobiles in particular leading to a build-up of inventories. This, however, changed in October with this segment showing an upward movement.