Omicron scare: Economy needs continued handholding, says PHDCCI

Industry body PHD Chamber of Commerce and Industry (PHDCCI) on Saturday emphasised on the need for the Centre's continuous handholding of the economy to mitigate the uncertainty caused by the looming impact of new Covid variant Omicron.

"Although the resilience of Indian economy is very strong and we expect a double digit GDP growth in 2021-22 on the back of effective policy measures undertaken by the government, we still have to mitigate the uncertainty caused by the looming impact of Omicron," PHDCCI said in a statement.

Out of the nine lead economic and business indicators of QET (Quick Economic Trends), tracked PHDCCI, six have shown uptick for November 2021, as compared with seven out of 10 indicators showing the uptrend in October 2021.

"Unemployment, exchange rate, manufacturing PMI, GST collections, exports and E-way Bill registered a positive growth in November 2021. Exports registered a positive growth of 27 per cent in November 2021, increasing from $23.6 billion in November 2020 to $30 billion last month," the industry body said.

Besides, GST collections registered a y-o-y growth of 25 per cent from Rs 104,963 crore in November 2020 to Rs 131,526 crore in November 2021.

"E-way Bills have shown y-o-y growth 5.9 per cent in November 2021, increasing from 57.7 million in November 2020 to 61.1 million in November 2021," it said.

As per the statement, unemployment declined sequentially by 9.7 per cent in November 2021, from 7.8 per cent in October 2021 to 7 per cent last month.

"Exchange rate appreciated by 0.6 per cent from average of Rs 74.9 per US dollar in October 2021 to Rs 74.45 per US dollar in November 2021. The sequential growth of manufacturing PMI increased by 3 per cent in November 2021, from 55.9 points in October 2021 to 57.6 points last month," it said.

However, forex reserves registered the decline of (-)1 per cent, decreasing from $642 billion in October 2021 to $638 billion in November 2021.

Similarly, the S&P BSE Sensex (monthly average) declined by (-)2 per cent in November 2021 from 60,422 in October 2021 to 59,416 last month.

"Passenger vehicle sales registered decline of (-)19 per cent in November 2021 from 2,64,898 units in November 2020 to 2,15,626 last month," the statement said.

According to Pradeep Multani, President, PHDCCI, supply side issues such as high input prices, shortage of raw materials, among others, are impacting the production possibilities and reducing the price cost margins of the producers.

"At this juncture, there is a need to address the high commodity prices and shortages of raw material to support the consumption and private investments in the country," the statement said.

--IANS

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