As green shoots of economic revival have started to become visible, HDFC Chairman Deepak Parekh today said every economy goes through slowdown but there is no doubt that the slump is temporary and the USD 5 trillion economy target is achievable. He also urged the youngsters not to get consumed by the economic slowdown and low confidence. Stressing that India will be an important engine for the world, he said that the tide will change soon as the economic environment will and has to improve and thus one should not be disillusioned with the current difficulties. India's growth has been continuously declining for six quarters, which has led to pessimism across all quarters of the economy.
However, the revival process has started as indicators such as non-financial indicators, agricultural produce, and animal spirit have significantly improved in recent months. Credit Rating agency ICRA has also shown that 11 of the 16 non-financial indicators such as the output of passenger vehicles, commercial vehicles, motorcycles, CIL and refinery output, showed on-year improvement in their performance in Q3 FY2020, compared to the previous quarter. The agency, thus, also anticipated a pickup in the real GVA and GDP growth in the third quarter of the current fiscal.
In another major development that has happened lately, the government has released the first advance estimates of 2019-20 of area and production of various horticulture crops, showing that the crop production has increased over the last fiscal year. Benefitting from the new orders for exports, the industry bodies have also shown optimism in the form of substantially high manufacturing and services PMI in the month of December.
Meanwhile, the government and the central bank have been continuously taking steps to improve the economic condition of the country. While RBI cut the interest rates continuously for five times in 2019, Finance Minister Nirmala Sitharaman also announced a slew of measures to provide cushion for the sagging economy. Along with providing surplus liquidity into the system, the government also made landmark decisions like cutting the corporate tax, leaving more profits for the companies.