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A Few Flashpoints In A Sagging Economy

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A Few Flashpoints In A Sagging Economy
Rajat Mishra - 03 December 2019

New Delhi, December 3: Recent macro data is showing signs of recovery even as GDP paints a dismal picture.

While gross direct tax and GST collections are looking up, GDP growth rate falling to a six-year low to 4.5 per cent haunts everyone. It shows, we still have a some time to come out of this gloom, although revival is on the cards. Let us have a closer look at what the data is showing.

GDP Number

Just a few months ahead of the budget, GDP number has fallen to a six-year low at 4.5 per cent for the second quarter, by 0.5 per cent. Taking cognisance of this, finance minister Nirmala Sitharaman had recently said, "I expect third-quarter GDP to be better. The auto sector has to a large extent has cleared inventory and banks are moving cash to NBFCs and the government has kept all the doors open.”

GST Collection

GST collections rose by 6 per cent to Rs 1.03 lakh crore in November, reversing two months of decline. Collection was at a seven-month high, a sign of revival.

Gross Direct Tax Collection

Gross direct tax collection has increased by 5 per cent till November, the FM said in Parliament, allaying fears of corporate tax reduction impacting revenue collection.

Purchaser Manager Index

Another data that shows signs of recovery is Purchasing Managers' Index (PMI) by HIS Markit. Manufacturing PMI rose from 50.6 in October to 51.2 in November. While the increase, remained subdued compared to earlier years and much below historical averages, a number above 50 indicates expansion.

Unemployment Data

The unemployment rate fell close to 1 per cent in November to 7.48 per cent from 8.45 per cent in October 2019, according to the Centre for Monitoring Indian Economy (CMIE) data. In October, the unemployment rate had touched a three-year high. In the preceding months of September and August, the unemployment rates were at 7.16 per cent and 8.19 per cent, respectively.

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