High Frequency Indicators Showing Material Improvement In Indian Economy Says CII

With the easing of restrictions and the economy entering an Unlock phase from June 1, the high frequency indicators which are coming in have been showing a material improvement as compared to the multi-year lows seen in April. A clutch of indicators including GST collections, railway freight traffic, petrol consumption, peak power demand, electronic toll collections among others have all mirrored the incipient signs of recovery. Though still early, these are indeed promising signs, pointing towards a V-shaped recovery in the immediate aftermath of the lockdown. "In order to nurture the nascent signs of recovery, it is important to mitigate the uncertainties that are currently prevailing regarding the restrictions. Corporates are unable to plan beyond a horizon of a few weeks, affecting all operations", said Mr Chandrajit Banerjee, Director General, CII.

"Although it is not possible to predict the course of the pandemic, a dashboard approach, triggering predictable responses based on the progression of infections, can reduce uncertainty and boost both consumer and industry confidence, which in turn will support demand and investment recovery", added Mr Banerjee. Further, in order to ensure that the supply chains function seamlessly across state & district boundaries, including the containment zones, the latter should be limited to micro areas instead of a wider area.

On its part, the government has played a big role in driving the nascent recovery process by providing direct cash & food transfers to the rural & urban poor. "In a significant confidence building measure, it is encouraging to note that the government dues to the industry have started coming in, which are likely to serve as a big and a direct liquidity booster to industry", highlighted Mr Banerjee. Other marquee schemes announced as a part of the Atmanirbhar stimulus package, such as the Rs 3 lakh crore collateral free loan for MSMEs & other businesses and the Rs 30,000 crore special liquidity scheme for NBFCs/HFCs/MFs have all taken off well, he further added.

It is pertinent to note that the recession staring at us in the current year is different from the previous recorded episodes of recession which were all triggered by a monsoon failure. This year, the agricultural sector has emerged as the beacon of hope for India's economy.

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