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Contents
What is the news?
The finance ministry’s report on Indian economy for July indicates that Indian economy is witnessing a revival. Recent rise in consumer demand among the rich nations is providing an opportunity to Indian exporters to expand their market.
Parameters indicating economic revival
- Increase in Purchasing Manager’s Index for manufacturing sector – due to increase in demand as a result of ‘revenge shopping’
- The term ‘revenge shopping’ means spending excessively after a period when one has had limited opportunities to spend.
- Increase in GST collection above Rs. 1 trillion
- Rail freight movement carried goods of 112.7 million tonnes which is highest ever achieved target
- Other indicators like automotive sales, highway toll, e-way bill generation also reflect a revival of the economy.
Opportunity in exports
- India’s recent performance at ports is impressive. Our export shipment has gathered momentum and if this momentum sustains we can achieve our target of $400 billion in merchandise exports for the year 2020-21.
- Even WTO expects the global trade in goods to rise by 8% this year from -5.3% growth in last year.
- Fiscal stimulus in America is offering a robust market for exporter. Increase in household savings in America due to this policy creating a room for expenditure boom in the economy which can have a multiplier effect on other economies too
What needs to be done?
- Removing barriers to our global competitiveness – like high tariffs on inputs, duty inversions of intermediate and ready to use products need to be removed.
- Empowering e-commerce platforms – since there is increase in online spending as a fallout of covid we need to encourage and empower e-commerce platforms to reach richer markets.
- Improving the supply quality and back end operations (backward and forward linkages) for e-commerce entities
Terms to know
