Green shoots visible in Indian economy: PM Modi

Modi said the experience of the first two weeks of Unlock 1.0 would help the Union and state governments form strategy for the future

Green shoots visible in Indian economy: PM Modi

NEW DELHI: Prime Minister Narendra Modi on Tuesday said there are green shoots visible in the Indian economy over the last few weeks ever since the lockdown has been lifted.

Addressing 21 chief ministers and lieutenant governors of union territories on the first day of his two-day meeting, Modi said the experience of the first two weeks of Unlock 1.0 would help the Union and state governments form strategy for the future.

“With the steps taken in the last few weeks, green shoots are now visible in the economy. Power consumption, which was earlier reducing is increasing. Fertiliser sale in May this year has doubled since May last year. This time, kharif sowing is 12-13% more compared to last time," Modi said in his address which was telecast online.

Heads of union Territories, northeast states, hill states like Uttarakhand and Himachal Pradesh and opposition-ruled states including Punjab, Jharkhand, Kerala and Chhattisgarh were present at today's meeting.

"It is a fact that India is one of the countries in the world with lowest mortality. States are showing confidence that India can handle the fallout, take care of the economy. Unlock 1 has taught us that if we follow all regulations then corona can cause us least damage," Modi said.

This comes in the backdrop of Indian economy limping back to normalcy after the lockdown. India’s power and overall energy demand, which had nosedived, is also gradually reviving to its pre-lockdown levels. Energy consumption, especially electricity and refinery products, is typically linked to overall demand in an economy.

"The more we try to manage the spread of coronavirus, our economic activity will increase, our markets will open… After facing three consecutive months of less exports, in June exports have bounced back and is more than the pre-covid period of last year. These indications are encouraging us to go ahead," he said citing figures on increase in digital payments and toll collections.

Mint had reported on 5 June that traffic congestion, power generation, port activity, vehicle registration and other high-frequency data point to the economy perking up as India reopens, recovering from a devastating slump as factories went idle and people were ordered to stay at home amid the pandemic.

Demand for petroleum products doubled in May from the previous month, the country’s largest refiner Indian Oil Corp. Ltd (IOC) said, as India’s economic engines whirred back to life with the easing of lockdown restrictions. Capacity utilization, which had shrunk to 39% at the beginning of the lockdown, has since rebounded to 83%.

The Centre has been under fire from various quarters for its handling of the lockdown, with critics holding that while the restriction was necessary, it was unplanned, resulting in a mass migration. Even as the government announced a 20 trillion stimulus package, there were claims that the Centre had overlooked the plight of migrant workers who have been worst hit by the lockdown.

The 21 states, which met PM Modi, have a total of more than 19,000 cases with over 130 deaths. State governments believe that while the situation is under some control, more testing should be conducted. This is the sixth round of meeting of the PM with chief ministers. The first meeting was held on 20 March.

India is unlocking its economy in phases started 8 June allowing more economic activity in order to spur consumer spending. States feel that there is need for a staggered withdrawal from the lockdown and maintaining a fine balance between opening up of economic activities and doing more tests.

With the economic situation expected to worsen, the new lockdown playbook involves phased reopening, with the onus largely shifting to the states. The country has been under stringent curbs since 25 March with the lockdown being extended four times since then to contain the coronavirus pandemic.