As a series of numbers came out yesterday, the economy appears to be reviving from its record dip in April. The output of eight core infrastructure industries shrank 23.4% in May from a year ago. But it is better than the record drop in April this year.
The automobile industry is expected to take a dip anywhere between 6-70% compared to a year ago. But increasing enquiries for two-wheelers and cars in rural and semi-urban markets show a gradual improvement in demand.
Another silver lining is that, for the first time in a decade, India’s Current Account position entered into a surplus. In January – March quarter, Current Account ended in a surplus of $600 million owing to the decline in imports and an increase in software services income.
The shortfall in tax revenues and the additional burden caused by a massive relief package is expected to widen India’s fiscal deficit. It might widen up to 7%of GDP, which is twice that of the budgeted estimate.
Indian equity benchmarks for the April-June quarter has ended with the strongest gains since 2009.