Domestic economic activity is recouping from a brief spell of moderation in January in view of the less virulent effects of the Omicron variant, the Reserve Bank of India said in its monthly bulletin.
It also said that domestic macroeconomic conditions are striking a different path than global developments.
“In India, the recovery in economic activity is gaining strength and traction as it emerges from the third wave. Both manufacturing and services remain in expansion with optimism on demand parameters and an uptick in consumer and business confidence,” the bulletin said.
“Better planning and strategy, management of supply chain logistics and accelerated digitalization helped firms mitigate pandemic risks.”
Unlike in the first two waves, the RBI said that overall consumer and business confidence stayed resilient on the back of the accelerated pace of vaccination, better prospects on the general economic situation along with household incomes and spending.
According to the bulletin, in February 2022, mobility indicators have recovered to pre-pandemic levels while unemployment dropped.
“As businesses return to new normal, hiring activities have gained traction – several Indian firms, global giants, and startups have announced massive hiring plans for India.
“Buoyant revenue collections under the goods and services tax (GST), robust toll collections, e-way bill generations are all reflective of the ongoing revival.”
As per the RBI, the farm sector remains upbeat on the back of higher minimum support prices (MSPs) announced by the government.
“The manufacturing activity remains in expansion with optimism on demand parameters such as production volumes, new orders and job landscape during Q4:2021-22. Firms expect further improvement in capacity utilization and overall financial situation.
“Firms in the services sector remained optimistic on demand conditions, while their expectations on overall business situation, turnover and employment conditions have moderated marginally.”