India’s economy is not in trouble said the finance minister of India citing ‘Green Shoots’. Nirmala Sitharaman said that seven indicators are showing a positive outlook on the Indian economy.
Seven Green Shoots Boosting India’s Economy
In reply to the debate of Budget 2020 in Lok Sabha, she listed seven signs of the revival of the economy. These include:
- Global Sentiment
- PMI Manufacturing Index
- Forex Reserves
- Gross GST collection
- Secondary markets
Further, she stated that despite the downturn, Indian economy is picking up as the seven green shoots are indicating growth. Also, she highlighted India’s GDP growth from two trillion dollars in 2014-15 to 2.9 trillion dollars in 2019-20.
FDI and FPI
Nirmala Sitharaman mentioned the role of global sentiments in the positive outlook as foreign investors showed confidence in the country. Further, she said that despite the slowdown, India managed to attract FDI of USD 24.4 billion in the April-November period of FY20. FDI increase was USD 3.2 billion more this year compared to previous year. Further, the positive Net FPI from April to November (FY20) at USD 12.6 billion, over $3.9 billion than FY 19. Besides, she added that the announcement of NIP may add to the flow of FDI even to Brownfield projects. Hence, the government needs to identify green shoots and work on them to improve Indian economy.
Index of Industrial Production and Secondary Market
Citing the IIP index, she said that industrial activity is on a rebound. IIP index has shown a growth of 1.8% as against 3.4% contraction, in October 2019. Further, she mentioned the improvement in Purchasing Managers Index (PMI) from 52.7% in December and to 55.3%in January this year. Also, she highlighted the increase in forex reserves from USD 413 (March 2019) to over USD 456 billion in January 2020.
She confirmed growth in GST collections. Also, GST revenue for January 2020 stood at Rs 1,10,828, which is 12% more than the collections of January 2019. Further, she stated that BSE Sensex increased by 5.6% up to 31st January 2019, over the end of March 2019. As a result, the secondary market is restoring its confidence.
In all, FM declared that India is on a positive growth trajectory and expect strong Indian Economy in future.