New Delhi: The series of broad-based policy measures undertaken by the Government during the last 10 months have enhanced the economic activity at significantly higher level, the January month economic activity based on the composite index of three broad economic indicators including GST collections, Passenger Vehicle Sales and SENSEX hits all-time high at 121.7 at a base year of 2018-19 equal to 100, said Mr. Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry in a press statement issued here today.
The trend in PHDCCI Economy GPS Index shows that the Indian economy is moving forward in the direction of improved momentum as compared to that of its level in January 2020.
On the back of robust measures of policy stimulus undertaken by the Government, the higher trend of PHDCCI Economy GPS Index to the tune of its all-time high value of 121.7 in January 2021 reinforces the growing business and demand momentum in the country and further the government’s view that the economy is in a V-shaped recovery, said Mr. Sanjay Aggarwal.
The PHDCCI Economy GPS Index during the period April – January of FY 2020-21 stands at 89.4 as compared with April – January FY 2019-2020 at 97.9. The growing trend of PHDCCI Economy GPS Index indicate a stronger starting point for the 2021–22 outlook of Indian Economy, further supporting the PHDCCI’s revised growth projection for Indian Economy at (-)7.2% for the current financial year 2020-21.
Further, as a result of recovering investor sentiment, economy has potential to accelerate at 11% growth trajectory in the next financial year 2021-22 as envisioned by the FY 2020-21 Economic survey of Government of India, said Mr. Aggarwal.
GPS Index: Monthly Trend (Base: 2018-19=100) Movement of GDP and GPS over the quarters
Source: PHD Research Bureau, PHDCCI Economy GPS Index
Note: GPD growth rate figures for Q3 and Q4 FY 2020-21 are projections made by PHDCCI
On a monthly basis, PHDCCI Economy GPS Index has shown sharp recovery from the lows of 39.6 in April 2020 to 50.1 in May 2020, 75.1 in June 2020, 85.6 in July 2020, 90.5 in August 2020, 100.2 in September 2020, 109.6 in October 2020, 106.9 in November 2020, 114.9 in December 2020 and 121.7 in January 2021, said Mr. Sanjay Aggarwal
The economic and business indicators have shown a remarkable improvement due to which Economy GPS index increased to 110.4 in Q3 FY 2020-21 from 92.1 in Q2 FY 2020-21 and 54.1 Q1 FY 2020-21, said Mr. Aggarwal
The proactive reforms undertaken by the Government in last 10 months have pulled the economy from the low growth of (-)23.9% in Q1 FY 2020-21 to (-)7.5% in Q2 FY2020-21. The continuous improvement in the key economic and business indicators suggests that the economic recovery is turning from steady to speedy path and expectations of a positive GDP growth at more than 1% in Q3 and more than 3% in Q4 FY 2020-21 are becoming strong, said he said
For the month of January 2021, values of all the three parameters of PHDCCI Economy GPS Index stood at their all-time high as measured across the last four financial years. GST Collections surged to an all-time high of Rs. 1,19,847 Crores in January 2021. Sales of passenger vehicles grew for the sixth straight month and stood all-time high at 3,03,904 units in January 2021. Further, SENSEX (Daily average) was at its all-time high at 48580 in the month of January 2021, said Mr. Aggarwal
Going forward, there is a need to further fuel the drivers of household consumption and business investment, while creating well-designed social protection policies for the vulnerable sections of the society and ensuring fiscal sustainability, said Mr. Aggarwal
Further infrastructural spending by the government would help stimulate confidence further among firms and households, generating stronger consumption, investment, and employment upturns, he said
The continued implementation of expansionary fiscal policy should aim to facilitate the transformation to a more digital and inclusive economy, while managing fiscal and financial risks, said Mr. Sanjay Aggarwal.
PHD Chamber of Commerce and Industry (PHDCCI) Economy GPS Index is a composite index of 3 lead economic and business indicators with base year at 2018-19=100, which measures the broad economic and business activity. The PHDCCI Economy GPS Index, based on the monthly values of three high frequency indicators viz., GST collection (Rs. Crore), Passenger Vehicle Sales (units) and SENSEX (daily average), helps to find the direction of the economy. The three broad indicators are representing not only demand and supply but also revenue growth of the government and financial markets movement in the country. GST collections indicate the momentum of business activity, passenger vehicle sales is broad indicator of demand activity in the economy and movement of SENSEX indicate mood of the investors both domestic and foreign and India’s attractiveness to the foreign investors on the back of various reforms undertaken by the government, said Sh. Sanjay Aggarwal