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Indians are returning to the workplace, pay hikes are forecast, the markets are spiking, imports have fallen and a vaccine is in sight. Significant growth is being forecast for the next four quarters.
The India story is living up to its brand promise. All indicators show that there is a steady return to the workplace as jobs are returning and the economy is fighting its way out of the restrictions that had been imposed upon it due the national lockdown following the destruction wrought by the pandemic.
Experts are indicating, with a fair degree of confidence, that headhunters have been busier than usual and indications of a rebound in the employment market are noticeably visible.
In short, the worst may be over.
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Lending further credence to the observation was the Nifty 50 index which cracked the crucial 13,000 psychological barrier yesterday buoyed by the progress of a Covid-19 vaccine which would further grease the wheels of an economy which is slowly building up speed. Monthly FII inflows of $6.5 billion into Indian stocks in November have so far been the best since at least December 2006.
According to Reuters, The NSE Nifty 50 gained about 12% so far this month on the back of upbeat vaccine trial results and strong inflows from foreign institutional investors (FII. The S&P BSE Sensex was 0.75% higher as well reflecting progress. Other Asian markets also traded higher on Tuesday as US President-elect Joe Biden was given the go-ahead to begin his crucial White House transition which had been limbo for 16 days since he won the elections.
India is also all set to report a current account surplus at the end of the current financial year ending in March 2021, mainly led by a fall in imports, according to input shared by the chief economic adviser, Krishnamurthy Subramanian, at the ministry of finance. India′s current account surplus rose to a record $19.8 billion in April-June as its trade deficit narrowed sharply according to the Reserve Bank of India.
The demand for imports has fallen amid the pandemic, linked with economic reforms initiated by the government to boost manufacturing.
On the vaccine front, AstraZeneca′s encouraging interim results for its COVID-19 shot were followed by manufacturer Serum Institute′s announcement that it would focus first on supplies to India, raising hopes that the vaccine could become available quickly in the world′s second worst-hit country.
With Covid cases seeing another spike in cities across India the vaccine would allay fear and the optimism that things would normalize faster would galvanise the workforce and sectors.
The bottom line is that Indians need to go to work. At least 122 million people went jobless in April due to the lockdown which was important in order to arrest the rising infection and death rates even though it came at the cost of the economy sliding. High-frequency indicators are now showing a revival. The government is due to publish gross domestic product data for July-September on Friday and the central bank, which has slashed interest rates, is scheduled to review policy next week.
The data never lies and it showed when India's unemployment rate eased to 6.98% in October from as high as 23.5% in April according to private research firm Centre for Monitoring Indian Economy. This is expected to improve further with the construction and real estate sectors powering a demand for jobs.
The expectation is significant growth will be registered in the following four quarters and companies are preparing for this flight by ensuring that they offer pre-Covid salaries with 87 percent planning pay hikes next year and invest in talent.
This is no time for complacency. Rather it is time for India to fortify itself and keep planning to stay ahead of the curve. The outlook, while encouraging, should serve up quiet optimism backed by steely resolve.