The Indian economy is showing signs of a strong rebound from the Covid-19 second wave lows. CNBC-TV18’s Latha Venkatesh has the fine print. There are green shoots, but they're not really grown into trees yet, she says.

Export Data

The latest data we have is a superb number. It is the highest data and it is certainly a multiyear high, maybe an all-time high, definitely much higher than the long-term average.

Import Data

Imports, again at $46 billion is a near-term high. Looking at the non-oil non-gold imports, which really matters for growth, there as you can see, it's not that good. A lot of metals, chemicals and manufacturing items have been imported. So Indian economy is recovering enough for imports to grow. But the non-oil and non-gold imports are not quite there just yet.

Manufacturing PMI

This has shown a fairly decent recovery from 48 to 55. We have seen a 55 to 60 almost from last September to up until this March. So we are nowhere near pre-Covid enthusiasm.

Auto sales

Bajaj Auto is the only one which showed in terms of two-wheelers, a very good number, almost their usual average and that's because the exports are doing well. If you look at Hero MotoCorp it is still struggling. Hero, in 2018-19 used to average six to seven lakh vehicles a month. So they are a distance from normalcy. Maruti again, it's an improvement from perhaps the terrible numbers in May. But it's quite a distance from the three-year-ago level, showing that the performance is not all that good.

GST collections

It is an excellent number at 1.16 lakh crore, considering the manufacturing and services are not working to capacity. So, this is a smarter collection. The government is using data mining, interfacing database data sets, and therefore it doesn't show growth as much as it shows good tax implementation. The point is it is a seven percent two-year CAGR and not comparing to last year because last year was terrible 33 percent above last year, but seven percent above that is a two years CAGR of seven percent clearly shows they're getting it right in implementation it is higher than pre-COVID-19 level.

Direct Taxes

Award for the best performance clearly goes to direct taxes, especially corporate taxes. Total tax mop-up by the Centre at 4.13 lakh crore in the first quarter. It is three times what it was last year, same time. And the important part is what is it as a percentage of the full year, it is 27 percent of a full year. In any normal year, we would have done only half of that. So that's the most important point 26 percent of full-year tax collections in the first three months is a record, we normally do about 15 percent.

So excellent corporate profits mean excellent growth. And if you look at the CAGR over two years, it is a 37 percent CAGR. If you only want to compare it to last year, it is a 129 percent growth. And if you're comparing it over two years, it is a 77 percent growth. And you know, 2019 was a normal year. So clearly, corporates are doing very well. But maybe that is already reflected in the mid-cap index. That one is up 35 percent since January, the small-cap index is up 50 percent since January.

For full details, watch the video

(Edited by : Ajay Vaishnav)

First Published:Aug 3, 2021 5:03 PM IST