India's September economic activity intact; demand to be hit: PHDCCI

09 Oct '21

2 min read

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Though India’s economic activity was intact in September, high cost of inputs vis-à-vis skyrocketing global commodity prices, container shortage and unavailability of some raw materials, such as semi-conductors, will affect demand and production possibilities in the coming months, said Pradeep Multani, president of the PHD Chamber of Commerce and Industry.

The prices of the basic raw materials have increased by more than 50 per cent during the last one year and that is posing a challenge to small businesses, said Multani in a press release.

The PHDCCI economy GPS index for September 2021 fell to 116.2 compared to 116.7 for August 2021 (base year 2018-19 = 100). The figure was 100.2 in September last year.

The sequential growth of SENSEX (average of daily close) has increased by 6.4 per cent from 55238 in August 2021 to 58781 in September 2021. The sequential growth of goods and services tax collections increased by 4.5 per cent from ₹1,12,020 crore in August 2021 to ₹1,17,010 crore in September 2021.

The PHDCCI economy GPS index during April-September of fiscal 2021-22 stands at 112.6 compared to 73.5 for the same duration in the last fiscal.

At this juncture, there is a need to address the high commodity prices and shortages of raw material to support the consumption and private investments in the country, said Multani.

The drivers of household consumption need to be further strengthened to enhance the aggregate demand as it will have an accelerated effect on expansion of capital investments, he said.

More and more direct benefit transfers needs to be considered for the urban and rural poor under the various welfare schemes in addition to the free distribution of dry rations till Diwali as already announced by the Hon’ble Prime Minister, he added.

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