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Economic impact of Covid 2nd wave likely to be muted: FinMin
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SME Times News Bureau | 07 May, 2021
As states take to lockdowns amid the severe Covid crisis, the Finance
Ministry in a report has said that second wave of the Covid-19 poses
downside risk to economic activities during April-June, although the
impact is expected to be muted compared to that in the first wave.
The
'Monthly Economic Review' for April 2021 published by the Department of
Economic Affairs (DEA) said that learning to "operate with COVID-19"
provides a silver lining of economic resilience amidst the second wave.
"The
second wave of COVID-19 has posed a downside risk to economic activity
in the first quarter of FY 2021-22. However, there are reasons to expect
a muted economic impact as compared to the first wave. Learning to
"operate with COVID-19", as borne by international experience, provides
a silver lining of economic resilience amidst the second wave," it
said.
Noting that the global economy recovered further in March
and April, powered with vaccination drives and fiscal stimuli by few
large economies, it said that in India the momentum in economic recovery
since the first wave moderated in April due to the second wave of
coronavirus.
It said that agriculture continues to be the silver
lining with record food grain production estimated in the ensuing crop
year on the back of predicted normal monsoons.
Rural demand
indicators like tractor sales recorded a growth of 172 per cent and 36
per cent compared to a low base in March 2020 and even the pre-Covid
month of March 2019 respectively.
Industrial production showed
mixed trends. While Index of Industrial Production (IIP) in February
2021 registered a broad-based decline of 3.6 per cent (YoY) and 3.9 per
cent compared to January 2021, the eight-core index posted a growth of
of 6.8 per cent (YoY) in March 2021 and 11.1 per cent compared to
February 2021.
In FY 2020-21, the core sector contracted by 7 per
cent compared to 0.4 per cent growth in FY 2019-20 with fertilizer
being the sole growing sector and electricity recovering steadily in the
second half.
The Purchasing Managers Index for manufacturing
rose further to 55.5 in April with consumer goods as the
strongest-performing category, followed by capital goods and then
intermediate goods. The rebound was also reflected in RBI's survey
estimates on capacity utilization and manufacturers' optimism for the
current year, the report said.
In the second half of FY 2020-21,
GST collections registered a good growth and collections exceeded Rs 1
lakh crore in each of the last six months owing to economic recovery.
GST collections registered another record high of Rs 1.41 lakh crore in
April, indicative of continual economic recovery.
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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
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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