Economy To Consolidate in March With Possibilities of Double Digit Growth in FY 2021-22: PHD Chamber

Economic activity is expected to consolidate in March 2021 as the Covid-19 impacted the difficult financial year 2020-21 is winding down with new hopes for the next financial year with a great growth trajectory of Indian economy, said Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry.

Out of the 10 indicators of QET (Quick Economic Trends) of economic and business activity tracked by the industry body PHDCCI, 7 have performed positive in February 2021 of which passenger vehicle sales has shown the highest growth of 18% over the corresponding month in the previous year.

Though COVID-19 cases are re-emerging in some states including Maharashtra, Kerala, Punjab, Karnataka, Gujarat and Tamil Nadu, the movement of the Indian economy remains steady in February 2021.

We are happy to note that the vaccination drive in the country is moving at a faster rate, with more than 2.6 crore vaccines being administered so far, said Aggarwal.

Positive GDP growth to the level of 0.4% in Q3 FY 2020-21 and a steady improvement in lead economic and business indicators would go a long way to strengthen economic growth in the coming quarters with the enhanced level of confidence of businesses, he said.

Ten economic and business indicators of QET include demand and supply indicators along with external and financial sectors indicators, according to PHDCCI.

Economic and business indicators such as GST Collections, E-way Bills, Railway freight, Passenger Vehicle Sales, Stock Market and Exports have shown a positive y-o-y growth in February 2021 as compared with February 2020, while the Exchange Rate has shown positive sequential growth in February 2021 as compared with January 2021.

At this juncture, to continue the pace of economic momentum, rapid administration of COVID-19 vaccination, especially in the States where COVID-19 cases are re-emerging, becomes crucial, said Aggarwal.

Further, immediate policy attention is required towards credit access to industry. Credit disbursement should be the top priority at this juncture by the banking sector. The focus should be on ensuring provision of hassle free disbursements of loans vis-a-vis enhanced liquidity for MSMEs, especially in rural sectors.

Also, there is a need to lower interest rates for consumers and businesses, lesser compliances for MSMEs vis-a-vis ease of doing business at the ground level.