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Worst seems to be over for economy, claims report
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SME Times News Bureau | 04 Aug, 2020
As the country goes through
phases of 'Unlock' and economic activities are permitted in a staggered
manner, the Department of Economic Affairs' (DEA) monthly economic
report has suggested that the worst seems to be over for the economy
with major indicators showing improvement.
The report for July
released on Tuesday, cited the Index of Industrial Production (IIP),
Purchasing Managers Index (PMI), power generation, production of steel
and cement, railway freight, traffic at major ports, e-way bill
generation among others to show that economic activities have picked
up.
"With India unlocking, the worst seems to be over as
high-frequency indicators show an improvement from the unprecedented
trough the economy had hit in April 2020," it said.
The report,
however, noted that the risks remain on account of the rising COVID-19
cases and intermittent state lockdowns. It said that the push for growth
in the coming months will come from rural India.
With the
forecast of a normal monsoon, agriculture is likely to cushion the shock
of the pandemic on the Indian economy in the current financial year
(2020-21), it said.
It said that the "timely and proactive"
exemptions from COVID-induced lockdowns to the sector facilitated
uninterrupted harvesting of rabi crops and enhanced sowing of kharif
crops.
"A record procurement of wheat has enabled a flow of
around Rs 75,000 crore to the farmers which will boost private
consumption in rural areas. Since September, 2019, the terms of trade
have moved in favour of agriculture and reinforced rural demand," it
said.
This has manifested in an increase in rural core inflation between March and June 2020.
"As
a result, the push for growth in coming months appears to be pitched in
rural India. The recent landmark reforms announced in the agricultural
sector could not have been better timed," the 37-page report said.
According
to it, the reforms that have deregulated and liberalised the
agricultural sector, further empower the farmers to become bigger and
more stable participants in India's growth journey.
However, it
noted that urban India and the world at large continue to fight the
growing menace of the pandemic, simultaneously on the health and
economic fronts.
The January-March quarter of 2020 witnessed
broad-based reductions in year-on-year (YoY) GDP growth in advanced
economies, ranging from (-) 3.4 per cent to (-) 14.2 per cent and in
emerging markets economies, between 2.9 per cent and (-) 6.8 per cent.
India,
which went into lockdown mode only in the last week of March, grew at
3.1 per cent in this quarter. Subsequently, in its June 2020 update, the
International Monetary Fund (IMF) has projected global output to
contract by 4.9 per cent in 2020, while OECD's projections are harsher
at 7.6 per cent.
GDP figures of April-June quarter of 2020,
slated to be released towards the end of August, will throw some light
on the expected recovery of the Indian economy, the report said.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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