According to an RBI article on Tuesday, the economy of India is gaining ground with a gradual recovery in manufacturing activity and a weakening of the contraction in services fuelled by comfortable liquidity conditions.
An article on ‘Economic Conditions’ states that aggregate demand conditions are driven by the release of pent-up demand after unlocking, while supply improves as the monsoons reach normal levels and showing activity picks up. The economy of India is growing, manufacturing activity is gradually changing, while the decline in services has slowed this all will result in strengthening the economy of India.
The Comfortable liquidity and financial conditions are most likely favorable in the support to recover the economy. He said. state restrictions, human mobility has risen to levels last seen in February 2021 before the start of the second wave, and also the electricity generation levels going to peak as in April,
It has been written by the team led by RBI Lieutenant Governor Michael Debabrata Patra. the article is written by those of authors and does not necessarily reflect the point of view of the Reserve Bank of India.
The most noticeable fact is the collection of the E-way bill rise up to the record break level which could be measuring of growth of 17.3% following after June.
Normalized to February 2020 levels, both intra-state, Eway bills, and interstate, have surpassed pre-pandemic levels.
In August (through August 8, 2021), the average daily Eway bills sequentially decreased 5.8%, with an impact on GST fees going forward.
Tolls rebounded in July, approaching the March 2021 record when Flastag became mandatory.
According to the article, fuel consumption saw a recovery in July 2021, while gasoline consumption reached pre-pandemic levels and jet fuel (ATF) saw a sequential improvement.
Regarding the price hike, the article said that headline CPI inflation was 5.6% for July 2021, 70 basis points less than 6.3% a month ago, and “reiterates the view that the recent hike has peaked and that Worst would be behind us.
Edible oil prices are under pressure. For the most important vegetables, the prices for potatoes, onions, and tomatoes have risen seasonally, he said.
The Deposit Insurance and Credit Guarantee Company Act (DICGC) is an important step in improving the plight of depositors, according to the article. 90 days. This is a major change. It extends the mandate of the DICGC from a limited payment box function to a payment box plus one that will strengthen public confidence in the banking system.
This bodies well for consumer protection and general financial stability, ”he said. About the Central Bank’s digital currency (CBDC), a fiat liability denominated in the national unit of account that is digitally issued and available to all economic actors, the article said, “There is a silent confidence that their time is at hand.”
Writers also said that the CBDC can only indirectly replace sight deposits at banks and will pair with physical cash.
It would compete with other online and offline payment methods and therefore support a more resilient and diverse payment system while avoiding the risks associated with private digital currencies.