India’s GDP: Quickest to fall, fastest to recover

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    By Rohit Vaid
    New Delhi, Dec 25 |
    The Covid-19 induced turmoil showed weakness as well as resilience of Indias economy in 2020, as the country’s GDP recorded abysmal fall and breathtaking recovery.

    The economy, which faced a severe slowdown prior to the pandemic, was decimated due to the lockdown imposed to curb the pandemic’s spread. Accordingly, the country’s GDP contracted by more than 23 per cent in Q1FY21.

    Nonetheless, slow tapering of mobility and lockdown restrictions along with pent up demand narrowed this contraction to under 10 per cent in Q2FY21.

    Consequently, the country entered into a technical recession.

    Nevertheless, festive season, pent up demand and rise in discretionary spending coupled with massive liquidity and government stimulus triggered one the fastest recovery pattern seen anywhere in the world.

    Some economy watchers described the phenomenon as a ‘V’ shaped recovery, whereas, others pointed it out as ‘U’ formation for the restoration of economic normalcy.

    All in all, sector after sector reported sequential growth with many crossing the year on year sales and production levels.

    Besides, various factors such as a low base, restocking and higher discretionary spends were cited for the heightened economic activity which was led by agriculture, electricity and the manufacturing sectors.

    Even though cheaper interest rates helped in spurring consumption, other vitals such as lower oil prices, lesser imports and an accelerated pick up of agricultural and pharma exports added positivity to the economic scene.

    After a healthy monsoon, the country’s festive season coupled with ‘unlock’ measures opened the floodgates for retail, wholesale and restocking, thereby, moving the wheels of economic revival.

    Furthermore, stock markets boomed, as macro-economic data and better-than-expected quarterly results attracted FIIs with prospects of a return, something that has been missing in other asset classes throughout the year.

    “A tentative recovery in volumes is underway, which is being counteracted by rising raw material prices and to a smaller extent employee costs. We expect the recovery to continue, albeit with a mild contraction in Q3 followed by a muted growth in Q4,” said Aditi Nayar, Principal Economist, ICRA.

    On a sector specific basis, while agriculture and allied industries pushed the economy forward, manufacturing too came out of its doldrums even though it has dipped slightly ever since.

    However, the service sector’s contribution was lacking in giving a real push to the GDP.

    Now with hopes of a mass immunisation programme armed with a high efficacy backed vaccine, front and back end services are expected to bounce back.

    “The next leg of sequential recovery may emerge from services which has been a laggard so far, while government spending may also improve at the margin,” Emkay Global’s Lead Economist Madhavi Arora said.

    “We see FY21 growth at (-)7.1 per cent with a mild downward bias. We reckon while 2HFY21 will see further pick up, sustaining sequential growth momentum beyond that will require easing domestic structural overhang, continued innovative policy support and better global backdrop,” she added.

    Apart from the government spending or the private final consumption, it was savings backed discretionary spends of common households that came in as a saviour for the economy.

    “We believe that the accumulated savings of particularly the Indian salaried class over the last 7-8 months due to limited expenses on travel and entertainment will get partly diverted to the purchase of vehicles and consumer durables,” Acuite Ratings & Research Chief Analytical Officer Suman Chowdhury said.

    “This is already reflected in the uptick in the demand of these products. The pent up demand and the availability of higher savings, therefore is expected to drive consumption demand over the next 1-2 quarters,” Chowdhury added.

    Other than stimulus, the Centre’s structural reforms, focus on the manufacturing sector and inflow of FDI into the country are likely to hasten the pace of economic recovery.

    According to Brickwork Ratings’ Chief Economic Adviser M. Govinda Rao: “The economy will continue to recover as restrictions are relaxed and capacity utilisation improves. It is important to undertake structural reforms to accelerate the pace of investment in order to reclaim a high growth trajectory.”

    In addition, experts cited India Inc’s massive shift to e-com, acceptance of higher safety standards and inculcation of efficiency boosting measures as other notable trends during this historic period.

    (Rohit Vaid can be contacted at rohit.v@ians.in)

    Source: IANS

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    PURPOSE FUELS YOUR PASSION: MUNISH MAYA

    PURPOSE FUELS YOUR PASSION: MUNISH MAYA

    Don’t get confused with your purpose and passion as both go well together

    Passion as well as purpose both goes hand in hand. Purpose defines the passion in life. If you are passionate about something then there will be a purpose behind it. And if you feel that you are passionate about something but you are not able to find the purpose behind it then please do self-analysis. There is surely something that you are missing out on. Munish Maya in his Instagram post took out few minutes to write about Purpose and Passion, as he feels that it is an important topic to be discussed with everyone. Mr. Maya started writing his post by making a statement, “Many people confuse passion with purpose. Others struggle to find both.”

    Self-analyzing is a very tough job and it’s completely natural to get confused. Solving this problem Munish Maya says, “Passion & purpose are distinct. Passion is the drive, the energy that makes us feel good. Like they say, ‘do what you love.” People follow their passion to live a stress-free life where they can enjoy whatever the work they are doing. It is well said, ‘Follow your passion and there will not be a single day when you will have to work.’ Whereas the most asked question in relevance to passion, ‘What is the purpose?’ is answered very well by Munish

    Maya in his same post, “Your purpose is the reason, your ‘Why’ behind what you do.” 

    Passion and purpose go hand in hand. Munish Maya says, “From over a decade, I experienced, learned, evolved & developed new passions. They have changed my life & perspective in a great way.” Passion serves the purpose of life. Munish Maya himself followed his passion when he realized that he cannot do a 9-5 profile job, and look at him now, he is the 1st Global Brand Ambassador of India. His passion leads him to define the purpose of his life. The only purpose of Munish Maya’s life is to serve people by guiding and enlightening them about their lives.

    This confusion between passion and purpose is not for the lifetime. To which Munish Maya explained by saying, “But the sweet spot is where your passion & purpose align.

    One fuels your internal drive while the other maximizes your outward impact.” When both purpose and passion start to align then you will start gaining success and positivity in life.

    Munish Maya describes it more beautifully, “And in the path of manifestation, Purpose fuels Passion. By focusing on your purpose, you align your work with your deepest drive- your passion.” If you are passionate about something in your life, then the purpose of your life is served.

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