JULY 08, 2019 News the Newsbehind 41
indianeconomicpanoramaby off ering price discounts for their
goods, considering subdued rises in cost
burdens. Tamed cost infl ation may assist
competitive pricing and lift demand to
a meaningful extent as we head into the
second half of 2019,” she said.
According to the report, the
manufacturing sector lost growth
momentum in June, following an
acceleration in May.
A softer increase in new work intakes
translated into slower rises in output
and employment, while the upturn in
quantities of purchases strengthened.
Th e June data continued to show only a
moderate increase in input costs, which
in turn, supported another round of
selling charges discounting.
Th e report points out that consumer
goods was the key source of growth,
where robust increases in sales, output
and employment were registered.
The report recorded modest
expansions in production and new work
was noted in the intermediate goods
category, but then, jobs had stagnated.
At the same time, operating conditions
in the capital goods sector were broadly
unchanged, the report mentioned.
Services sector activity contracts
for fi rst time: Meanwhile, the services
sector activity in June contracted for the
fi rst time since May 2018 as weak sales,
competitive pressures and unfavourable
taxation hampered output, a monthly
survey showed Wednesday.
The IHS Markit India Services
Business Activity Index fell to 49.6
in June, down from 50.2 in May, as
broadly stagnant sales caused the fi rst
drop in business activity in over a year.
In PMI parlance, a print above 50
means expansion, while a score below
that denotes contraction.
“Th e latest PMI results for India bring
some concerns over the sustainability of
the relatively robust growth rates seen
at the start of the year, and the ability
of companies to create jobs,” said
Pollyanna de Lima, Principal Economist
at IHS Markit.
In the service sector, there was
an outright contraction in business
activity which was prompted by broadly
stagnant sales. “It’s somewhat surprising
to see some companies linking subdued
demand to high tax rates, two years on
from the GST implementation, with
the hotel tax mentioned in particular,”
Lima said.
INDIA’S DIGITAL STORY
With 354 million smartphone
users and 1.2 billion mobile phone
subscriptions in 2018, India has turned
signifi cantly ‘digital’. Banking, ordering
food, cab booking, shopping, fi xing
appointments, online reviews and much
more, digital has become a way of life
writes Keshav Murugesh (Group CEO,
WNS and Chairman, NASSCOM). In
2018 alone, Indians downloaded 12.3
billion apps.
An average monthly consumption of
8.3 gigabits (GB) of data each month,
and the fact that 294 million active
users spend an average of 17 hours
per week on social media platforms
corroborate this fact.
McKinsey reports that by 2025,
core digital sectors could double their
GDP level to as much as $435 billion,
with emerging digital areas (in fi nancial
services, agriculture, retail, e-commerce,
logistics, energy, healthcare and
government services) creating $10-
150 billion of incremental economic
value. And this represents just 40 per
cent of our population with internet
subscription.
The government too, writes
Murugesh has shown a keen appreciation
for such digital empowerment and has
built policies and programmes around
it. Aadhaar, for example, can lay claim
to being the vehicle of digital adoption
in India. As the largest single digital ID
programme in the world, it has evolved
beyond individual identity verifi cationto spur consumer adoption of digital
services. McKinsey estimates that 85
per cent of bank accounts between
2014 and 2017 used Aadhaar for
identifi cation, and 82 per cent of public
benefi ts disbursement accounts are now
linked to Aadhaar.
If Aadhaar brought individual
citizens on the digital platform,
Murugesh says the Goods and Services
Tax Network (GSTN) introduced by
the government, did the same with the
country’s indirect tax paying business.
Financial inclusion is another
aspect of the impact of India’s digital
journey. Th e government’s Jan-Dhan
Yojana programme (which aims to
expand and make affordable access
to financial services such as bank
accounts, remittances, credit, insurance
and pensions) has allowed more than
332 million people to open mobile
phone-based accounts (according to
World Bank fi gures). Unifi ed Payments
Interface (UPI) has linked multiple bank
accounts facilitating banking services
through a single mobile application.
Th e success extends to non-fi nancial
sectors (logistics, supply chain and
agriculture), and the realms of societal
progress too.
But there are future challenge and
one of them is to ensue internet access
to the remaining 60 per cent of our
population, and moving to online,
current high percentage of retail cash
transactions.POLICY INITIATIVES
HIGHWAY CORRIDORS FOR
E-VEHICLES
The first highway corridors with
charging stations for electric vehicles
are expected to come up along the
Delhi-Jaipur and Delhi-Agra highways
by 2020.
The combined stretch of the