TOPIC ‒ A faltering recovery
Production levels in India’s industries appear to be hitting a roadblock amid what the Government has described in the Union Budget as an ‘overall, sharp rebound and recovery of the economy’ rejecting the ‘country’s strong resilience’. Factory output, as measured by the IIP, fell for the fourth straight month in December 2021 to a 10-month low of 0.4%, compared to the same month in 2020. While the Omicron variant had become a worry by then, its impact was limited to contact-intensive services sectors. From a nearly 13% year-on-year growth in August 2021, thanks to a low COVID-19 lockdown-hit base, the IIP growth has tapered off every passing month. By September 2020, most of the lockdown restrictions had been eased, so perhaps some labor force gaps and the shock to confidence and demand were the only hiccups for production managers. It was believed that those hiccups had been largely overcome after the deadly second wave receded in 2021. If that were indeed the case, industrial output should have seen a sharper pick-up in the last four months of 2021 than the mere 2.5% monthly average, particularly with festive season demand in play. That January’s GST collections hit a fresh record may suggest all is well, but tax revenues also get bumped up by inflation and quarterly filing options for smaller taxpayers. Moreover, GST revenues from imports of goods have been persistently rising faster than revenues from domestic transactions that include services imports. What makes the trend even harder to decipher is the volatility in month-on-month IIP numbers. The Economic Survey for 2021-22 seemed to be describing a different landscape when it stated that a nascent private investment recovery is expected to accelerate as private consumption will increase and raise capacity utilization levels. The RBI pegged capacity utilization in the second quarter of 2021-22 at 68% and this may not have inched up much in the third quarter. Economists believe the IIP prints suggest that the Budget’s bet on a consumption- and investment-led recovery is on a weak footing. Manufacturing actually shrank in December, with capital goods (reflecting investment activity) contracting by a sharp 4.6% from 2020 levels. Consumer durables saw a fourth consecutive month of contraction, while even non-durables tanked after a few months of insipid growth. With high commodity costs cramping producers, consumers still in cautious mode and the threat of a steep fuel price hike looming after March 10’s election results, the going is not likely to get smoother any time soon. That the central bank remains in growth-accommodative mode while the world is changing gears to tackle inflation, indicates its concern about the durability and quality of India’s recovery. The Government must reboot its rose-tinted assessment of the economy so that the ‘on-paper’ optimism is reflected in billowing factory chimneys.
The Hindu Editorial Words with meanings, synonyms, and antonyms
Amid (preposition) – In the middle of
Synonyms – Betwixt, flanking, barring, beneath, midway
Antonyms – Encircling, framing, environing, covering, encompassing
Tapered (adjective) – Restricted or low in size or space
Synonyms – Choked, exiguous, strait, slender, measly
Antonyms – Immense, commodious, voluminous, capacious, ample
Hiccups (noun) – Situations that require resolution
Synonyms – Predicaments, hassles, pitfalls, gremlins, vexation
Antonyms – Crutch, juncture, vantage, ascendancy, dominance
Persistently (adverb) – In an obstinate manner
Synonyms – Tenaciously, indefatigably, conscientiously, assiduously, mulishly
Antonyms – Intermittently, sporadically, erratically, fitfully, sparingly
Decipher (verb) – Figure out, understand
Synonyms – Twig, cipher, elucidate, fathom, demystify
Antonyms –Scramble, garble, inscribe, obscure, conceal
Nascent (adjective) – Just coming into existence
Synonyms – Incipient, fledgling, embryonic, inchoate, sprouting
Antonyms – Moribund, veteran, progressive, neoteric, withering
Shrank (verb) – To make or become physically smaller in size
Synonyms –Shriveled, squeezed, truncated, deflated, slimmed
Antonyms –Burgeoned, crested, soared, accumulated, escalated
Insipid (adjective) – Lacking in originality, variation, spirit or energy
Synonyms –Prosaic, jejune, trite, stale, tame
Antonyms –Appetizing, whimsical, quixotic, turbulent, zingy
