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New Economic Data Backs a Resurgent Indian Economy with Rising Jobs

Employment

In the past two to three weeks, a host of economic data has been released, but was crowded out by the announcement of the Union Budget of the Narendra Modi government.

While the recently announced Union Budget has laid out the vision for the future development of the country, the latest economic data reveals that the steps taken by the government in the past 6 months are showing results. This indicates that the Indian economy is poised for a take-off, and the cyclical slowdown has now bottomed out.

Massive Boost in Employment Recorded

Report released by Ministry of Statistics and Programme Implementation (MoSPI) shows that a total of 23.47 lakh formal jobs were added in the economy in the month of November 2019. This massive increase of jobs in the formal economy is the highest addition of this year.

The report revealed that 14.33 Lakh Jobs were added under Employees State Insurance Corporation (ESIC), 8.67 Lakhs were added in Employees Provident Fund Organisation (EPFO) and 46,686 subscriptions were added under the National Pension Scheme.

It also reported that 1.49 crore new subscribers had joined in financial year 2018-2019.

Massive Surge in Manufacturing Production Recorded

Continuing on the data of massive job increase, positive news on the massive increase in manufacturing production recorded in month of January this year has also come out.

Nikkei’s Purchasing Managers Index (PMI) manufacturing sector report for India reported that India’s manufacturing activity expanded at its quickest pace in nearly eight years in January 2020, with robust growth in new orders and output. PMI Index expanded to 55.3 in January, the highest recorded in over eight years. In response to this jump in sales, the report revealed that factories hired new workers at the fastest rate in more than seven years.

The Survey also reported an uptick in business confidence, as participants expect buoyant demand, new client wins, advertising and product diversification to boost output in the year ahead.

Services Index Expands to 7-year High

Service Industry, which is the major contributor to the Indian economy, also increased at a massive pace in the month of December 2019. The Nikkei/IHS Markit Services Purchasing Managers’ Index (PMI) rose to 55.5 in January from December’s 53.3, the highest reading since January 2013 and above the 50-mark separating growth from contraction.

The report also said that with business revenues rising, service providers continued to increase capacity to meet further strong growth in sales. It sounded a note of optimism, saying this is good news for jobseekers, particularly considering the results from the manufacturing industry which showed the steepest upturn in employment since August 2012. This strong increase came on the back of strong domestic demand showing increase in domestic consumption.

GST collections Continue on a High

GST collections which had also shown a massive increase in collection of revenue during December 2019 continued and increased its good run in month of January too.

GST collections in January 2020 crossed the ₹1.1 lakh crore mark for the month of January, the second highest collections since introduction of GST. This is only second time since introduction of GST that the monthly revenues have crossed ₹1.1 lakh crore, and sixth time during the year that it has crossed ₹1 lakh crore.

Thus, GST collections have now crossed the ₹1 trillion-mark for the third month in a row in January, a growth of 12% over the revenue during January 2019.

Investments in India Record a Historic Growth

Reforms by Modi government continue to make India one of the most attractive destinations in the world. Report released by United Nations Conference on Trade and Development (UNCTAD) said that in 2019, India attracted $49 billion Foreign Direct Investment (FDI), a 16% increase over 2018. This makes India one of the top 10 countries in the world to attract FDI.

Moreover, a big jump was also recorded in the Private Equity and Venture Capital investment (PE/VC). PE/VC is the money invested in new ventures in India.

In terms of value, 2019 saw PE/VC investments of $48 billion, which grew 28% compared to $37.4 billion recorded in 2018. In terms of volume, 2019 recorded 1,037 deals, a 35% increase from the 769 deals in 2018.

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