Business

Indian economy seen riding high


Published : 03 Dec 2021 09:51 PM | Updated : 04 Dec 2021 04:31 PM

The Wall Street Journal in an article published recently under headline ‘India’s Economy Hampered by Weak Consumer Spending’ said that India’s economy is rebounding after a brutal pandemic-induced recession, but job losses related to Covid-19 are weighing on consumer spending and the country’s economic recovery.

However, prominent business dailies like Bloomberg News do not subscribe to The Wall Street Journal’s line of reportage on the Indian economy and consumption pattern. Bloomberg News cites better-than-expected performance of the manufacturing sector, increase in demand for consumer durables and vehicle purchase, growth in real estate and small businesses, robust pace of vaccination as factors of scintillating performance of the Indian economy.

On the other hand, The New Indian Express in its report published under headline, “Acche Din for Indian economy? Growth engine picks up speed as Covid continues to subside” maintains that on the back of improvement in private consumption and industrial activities in the July-September 2021 quarter, the country has registered 8.4 percent growth. It further said the growth has surpassed pre-Covid-19 levels. The economy registered a record 20.1 percent growth in the April-June quarter, despite the second wave of the pandemic in the country.

The daily said in value terms, GDP stood at Rs 35,73,451 crore during July-September 2021, higher than Rs 35,61,530 crore recorded in the corresponding period in 2019-20. The English daily further maintained that private consumption grew 8.6 percent with the FMCG sector alone registering 12.6 percent growth in the July-September quarter.

The Wall Street Journal said that many people who had formal jobs have been forced to cobble together informal jobs that pay far less. Some have returned to their home villages to work on farms, and others have given up on looking for work altogether. There’s a huge amount of disguised unemployment. Everything is not well with the middle class.

But other media outlets are not ready to buy such arguments of the international daily. For example, the New Indian Express has maintained that India’s performance has been beyond expectations on the job front. Despite Covid-19 pandemic impacting the Indian economy in 2020, the country’s job market clocked 57 percent year-on-year growth in September 2021, a PTI report carried by The New Indian Express said. Quoting the Naukri JobSpeak report, the prominent wire news service said that led by IT (138 percent) and hospitality (+82 percent), most sectors showcased significant annual growth. The PTI report carried by the English daily again noted that hiring activity has also grown in education (53 percent), banking and financial services (43 percent) and telecom/ISP (+37 percent) as compared to September 2020. The report further maintained that hiring across all experience bands have also increased in September 2021 as compared to last year and it has taken place largely due to the overall positive performance of the hiring market as it recovers from the setbacks caused by the pandemic. During this period, demand for senior professionals belonging to the 8-12 years (75 percent) bracket witnessed a maximum increase followed by 4-7 years (65 percent), 13-16 years (57 percent), 0-3 years (54 percent) and above 16 years (38 percent)

The Wall Street Journal in its report further said that inflation is also nudging up food prices for consumers and the costs of raw materials for businesses in India. The wholesale price index climbed 12.54% in October, up from 10.66% in September, according to the Ministry of Commerce and Industry. The ministry blamed the high rate of inflation on a jump in prices on food, metals, petroleum and natural gas.

Mint, a prominent financial daily, on the other hand, has a different story to tell. According to the daily, Consumer Price Index inflation, the key policy target for the Reserve Bank of India, is appearing to cool down when most advanced and emerging economies are grappling with skyrocketing price levels. India has been able to keep prices seemingly under control, mainly due to base effects and low food inflation. In October 2021, CPI inflation, as per Mint, was 4.48 percent, staying within the 2-6 percent acceptable range for the four month in a row.

In view of positive economic growth, India’s Chief Economic Advisor Dr Krishnamurthy Subramanian recently predicted India could get double-digit growth in the current fiscal year. He said the country’s overall growth for the first half is positioned at 13.7 percent, and with a little over 6 percent growth in the subsequent quarters, the country would be successful in delivering double-digit growth.

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