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2nd WAVE OF COVID HITS HARD ON ECONOMY 

Indian Economy is facing tough times as the COVID 19 wave has hit hard in all aspects be it medical care, economy or stock market. Indian Economy macro factors seems to be under pressure as the whole of the country is facing rising cases of infection and deaths and also less of business due to night curfew and lock down in some or other forms.

US thinking of putting tariff on Indian Exports:- On 11 May 2021 there was debate in US parliament to put tariff of 25 % on Indian exports to USA. This was in retaliation to the Indian Govt putting “Google Tax” on the all foreign companies like Amazon, Google, Facebook who do business in India and income is above Rs. 2 crore they have to pay 2 % Google tax which came in effect from 1 st April 2021. This could spoil relation between US and India and could potentially lead to CAPITAL FLIGHT and MNC from USA not preferring India as business destination.

Moody downgrades Indian GDP to 9.2 %:- The International Rating Agency Moody has already down graded Indian GDP from 12 % to 9.2 % which shows that international agencies are lacking confidence about the Indian Growth story due to the pandemic.

 

FII selling heavily:- FII are selling heavily in the Indian markets. From 1 st April till 10 may 2021 they have sold shares worth around Rs. 17000 crore while in May 2021 they have sold shares worth Rs. 5200 crore.

IIP index negative:- The Index of Industrial Production IIP data which was earlier at -3.6 % has again come to -0.8 % which shows that still manufacturing is not picking up in the economy and the supply chain has been disturbed.

FMCG Sales down:- FMCG sales which is acid test for the consumption theme of India clearly shows that there is eminent slowdown in consumer spending which signals that GDP would crash out in the coming months.

STATE FMCG SALES IN APRIL %

Maharashtra -18

Delhi -34

Karnataka -19

Tamil Nadu -5

Gujarat -48

MP -50

Chattisgarh -65

Source:- Economic Times dated 13 May 2021.

Auto Sales down:- The auto sales were down by average from 7 to 35 % of various two and four wheeler companies across the board due to the lock down like situation and many retail counters are shut.