The Indian economy was on the path of high growth in March, a year on since the government imposed a nationwide lockdown to contain Covid-19, according to the State Bank of India (SBI) Research’s yearly SBI Composite Index.
The index touched a 70-month high of 55.9, in the range indicating high growth, after recording 55.2 for the previous month, said a report released on Thursday.
However, the monthly index, tracking sequential changes, declined to 52.1 in March, pointing to moderate growth, from 54.7 in February.
The eight core sector industries slowed at the fastest pace in the past six months with a 4.6% contraction in February as all sectors reported a decline in output during the month, said the report.
“Based on the SBI index, we believe IIP (Index of Industrial Production) and IIP manufacturing may contract in Feb’21 but may see a huge spike in growth in the range of 6-8% in Mar’21, mainly due to base effects,” said SBI Research.
While credit growth had declined to 5.1% in September last year on account of the initial pandemic-related restrictions on movement, credit offtake picked up to 6.6% in February this year, it said.
According to sectoral data for February, credit to the agriculture and services sector jumped in both year-to-date and year-on-year terms while there was deceleration in credit to industry and personal loans.
The private corporate sector recorded negative bank credit growth for the fifth consecutive quarter as its share in total credit declined to 28.5% in December last year, as against 31.4% a year ago, reflecting tepid demand conditions, said the report.
Source:economictimes.indiatimes.com