Healthy government finance, formalisation, rising exports, vibrant start-up ecosystem and right environmental awareness point to the economy getting back to track
After being hit by supply chain disruptions amid global uncertainties due to geopolitical developments and the COVID-19 pandemic, the Indian economy is on the recovery path as being reflected in various parameters. Equity Intelligence India founder & CEO Porinju Veliyath in a tweet said, “The Indian economy standing firm despite a host of global headwinds — healthy government finance, formalisation, rising exports, vibrant start-up ecosystem, revival of manufacturing, strong housing cycle, technology adaptation and right environmental awareness.”
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Formalisation of Economy
Veliyath said better tax compliance and collection point towards healthy government finances. The country’s gross revenue collection jumped to a record high of Rs 27.07 lakh crore in FY22, while the tax-to-GDP ratio jumped to an over two-decade high of 11.7 per cent, the finance ministry said on Friday. The total mop-up was 34 per cent more than the Rs 20.27 lakh crore collected in FY21.
He said that the Indian exports have never looked so good, and they will only get better and better. The country’s merchandise exports rose to a record USD 418 billion in FY22, on the back of higher outbound shipment of petroleum products, engineering goods, gems and jewellery, and chemicals. In 2020-21, India’s goods exports had stood at USD 291.8 billion, and in FY20, they were USD 313.36 billion.
Start-Up Ecosystem
Veliyath said the Indian start-up ecosystems attracting unprecedented capital is one of the best after the US and China. The first three months of the current calendar year have been strong for the Indian start-up ecosystem with 14 unicorns being created with an infusion of USD 10 billion across 334 funding deals. Also, robust momentum has been witnessed in the merger and acquisition (M&A) transactions of the startup ecosystem.
Housing Market
The CEO of Equity Intelligence India said the housing market is getting ready to boom after decades. Veliyath share a report that said global investors are looking to put billions of dollars into Indian real estate again as they see improvement in both residential and commercial segments. “From Abu Dhabi Investment Authority (ADIA) to Goldman Sachs to CPPIB (Canada Pension Plan Investment Board), a number of global investors are either tying up with Indian fund managers or developers to take part in India’s real estate sector.”
Environment
He said the environment is not forgotten and there is a sharp focus on renewables, electric vehicles, etc, in the country. The Indian renewable energy sector has added its highest-ever annual new capacity in FY22, driven by the solar sector which brought in 91 per cent of the new capacity. For FY22, the renewable power sector added 14,077 MW against 7,356 MW and 8,711 MW in pandemic hit-FY21 and FY20, respectively.
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Flagging external risks, the RBI in its bi-monthly monetary policy earlier this month said the sharp escalation in geopolitical tension recently amid the ongoing Russia-Ukraine war offset the benefits of the ebbing Omicron wave.
