After taking a severe beating due to the Covid pandemic the ensuing strict lockdown, reverse migration, etc the Indian Economy is now showing signs of looking up. We take a closer look at what the numbers indicate.
What’s the news?
- GST numbers recorded in September are at Rs 95,480 Crs. This is higher than in Sep 2019.
- The Manufacturing Purchasing Managers Index (PMI) rose to 56.8 in September 2020.
What does it mean?
GST Collections are an indicator of the level of economic activity within the organized sector. GST Collections showing a year on year growth is a positive sign. The PMI is the highest that it has been in the past 8.5 years. The PMI is an indicator of sentiment from a forward-looking perspective on where industry participants see the economy heading.
A few other metrics that are usually tracked to indicate current economic activity (Eway bills, railway freight loadings, highway toll collections, electricity demand, etc) are also showing an uptick.
This trend is quite positive given the prevailing economic landscape only 6 months earlier.
What does this mean to your wealth?
The return of economic activity has a direct bearing on companies in India. As an investor, there is a direct bearing on your investments since the performance of your investments reflect the performance of the companies underlying the same.
While these are initial upticks, the resilience of the economy and the ability of the companies to make the best of the changed circumstances will determine the way forward.