Bikky Khosla | 31 Dec, 2018
Two important sets of economic data
were released recently: first, on manufacturing growth and second on fiscal
deficit. According to the Nikkei India Manufacturing Purchasing Managers' Index,
manufacturing sector activity improved in November and touched an 11-month high.
This is good news. In contrast, official figures released last week show that
fiscal deficit for the first eight months of the ongoing financial year has
exceeded the target for the full fiscal. Needless to say, this development does
not augur well.
The details show that the Nikkei index
strengthened from 53.1 in October to 54.0 in November. This signals a strong
improvement in the health of the sector in almost one year. This is the 16th
consecutive month that the index has remained above the 50-point mark, which
means expansion. Particularly since August, manufacturing has seen healthy
recovery and the latest figures add to a rising confidence in the upturn. This
should, in turn, have a positive effects on employment generation.
In a written reply to the
parliament, Minister of State of Commerce and Industry, C. R. Chaudhary, mentioned
that the manufacturing sector has grown 5.6 percent in the April-October period
of 2018-19. He added that several measures – including Start-up
India, Ease of Doing Business, Modified Industrial Infrastructure Upgradation
Scheme, Business Reform Action Plan and Intellectual Property Rights Policy –
have been taken for the sector. However, it is a well-known fact that there is
a massive scope of improvement in this regard.
Coming to fiscal
deficit, the figures which show that the deficit amount for the April-November
period at Rs 7.17 lakh crore has exceeded the target for the full fiscal,
accounting for 114.8 percent of the budgeted target, is not a good sign. However,
the Finance Minister last week said that the current government's track record
in this regard has been better than any other
government in the history. He sounds confident and we all hope the reality will
soon meet his expectation.
I invite your