Sitharaman pronounces GoI’s commitment towards healthcare sector and meeting the demands of the economy in the face of the pandemic. India’s growth recovery could be marginally lower than expected.
Markets in India continued to display an optimistic mood in the face of declining Covid-19 infection rates which has had a galvanising effect with investors.
The upward swings of the market also corresponded with Finance Minister Nirmala Sitharaman’s pronouncement that the government of India would not hold back on injecting funds into sectors like healthcare or meeting other requirements of the economy if the need for it was immediate.
Parallel to this was a statement put out by The Serum institute of India who are looking to ramp up production of the AstraZeneca COVID-19 vaccine to about 90 million doses in June from about 65 million a month now.
The NSE Nifty 50 index appeared to be in good spirits rising 0.44% to 15,503.70 by 0515 GMT, while the benchmark S&P BSE Sensex climbed 0.55% to 51,1702.53. Both the indexes posted weekly gains of around 2% each, with the Nifty 50 closing at a record high last Friday.
Speaking to Reuters, Anand James, chief market strategist at Geijit Financial Services said, "Today's gains are on the back of tailwinds from last week and declining COVID-19 cases, and with expectation that the momentum will stay.”
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The second and more debilitating wave of the pandemic has affected economic activity but not as badly as one would have expected. India’s growth recovery, which started in the third quarter of 2021-2021 is like to be maintained in the January-March quarter while a full year contraction is estimated to be marginally lower than the previous estimate of a decline of 8 percent. It is believed that lockdowns have been less stringent and growth in manufacturing and exports has been higher. These observations have been coming out today as the government releases the provisional full-year Gross Domestic Product (GDP) data for fiscal year 2020-21. The data released will give insight into the economic growth in Q4FY21 (January to March quarter), before lockdowns and other restrictions were imposed in most states due to the second wave of COVID-19.
Conglomerate Reliance Industries Ltd and ICICI Bank Ltd provided the top boosts to the Nifty 50, gaining 2.5% and 2.1%. Reliance, which ended 6% higher on Friday, has risen in the last five trading sessions out of eight.
India reported its lowest daily increase in new COVID-19 infections since April 11 at 152,734 today, while deaths rose by 3,128.
In an interview with the Economic Times, Sitharaman reiterated that GST collections would be, “Better than what we used to get in October-November, but with some states under lockdown — and the e-way bills are indicating that — there could be some reduction. I want to maintain April’s level (of Rs 1.4 lakh crore). But I don’t see this dip as being something that will continue in the next few months. Last month was particularly bad, now we are already seeing that it is improving.”
Throwing light on speculation that the GoI was preparing for a bumper stimulus to ease the pain of the people and industries amidst the second pandemic wave Sitharaman stated that, “We are just in May, even the first quarter is not over. The Budget, which is designed for a Covid-affected economy, will have to go down to the people. We are not even taking that on board, and we have started talking about where is the big deal stimulus?”
The budget, according to Sitharaman, was designed to act as a stimulus. Many schemes announced during Atmanirbhar Bharat were still active, like the Emergency Credit Line Guarantee Scheme (ECLGS) which still has money in it. The Swamih Fund has also commenced with 135 projects all over the country to provide last-mile funding.
The ministry of finance, according to Sitharaman, was being pro-active in assessment but the variables keep changing with every day and passing week. This results in varying inputs as well based on the situation on the ground.
- Inputs from Reuters