IANS | 02 May, 2024
India's manufacturing sector continued to grow at a robust pace in
April on the back of strong demand although it was a tad lower than the
record-high that it touched in March, according to an HSBC survey
released on Thursday.
India has emerged as world's fastest growing
major economy fuelled by Government expenditure on big-ticket
infrastructure projects like highways, railways, power plants and
seaports. This has had a multiplier effect in creating more jobs and
incomes that have led to an increased domestic demand for goods and
services.
The HSBC final India Manufacturing Purchasing Managers'
Index (PMI), compiled by S&P Global, was recorded at 58.8 in April
which is a wee bit lower than the 16-year high of 59.1 for March. The
index has now been reflecting a rising trend for 34 consecutive months.
"April's
manufacturing PMI recorded the second fastest improvement in operating
conditions in three-and-a-half years, bolstered by strong demand
conditions," said Pranjul Bhandari, HSBC's chief India economist.
Business
optimism improved as firms expected demand to remain buoyant and
planned for higher production volumes in the next 12 months, which led
to hiring more workers during the month. The survey states that
increased demand by firms also led to an increase in raw material costs
and wages.
"However, firms passed these increases onto consumers
through higher output charges, as demand remained resilient, resulting
in improved margins," Bhandari added.
IMF's World Economic Outlook
report released last month has raised India's growth forecast by 0.3
percentage point to 6.8 per cent for 2024-25 and sees the country as a
bright spot "supporting global growth over the medium term and spill
over to other countries."
With China having fallen behind after
the crash in its real estate sector and US sanctions triggering an
economic slowdown, the IMF report views India and other G20 large
emerging market countries such as Brazil playing a bigger role in the
global trading system and pushing global growth going ahead.
The
IMF report also vindicates India's economic policy as it attributes the
robust growth rate to a "strong domestic demand" which has been created
by a huge increase in Government expenditure on large infrastructure
projects with a revival in rural demand.
Stepped-up allocations
for agriculture, rural employment schemes such as MNREGA and special
programmes for women self-help groups have helped to bolster rural
demand and create a larger market for industrial products.