Good news for economy, demand in manufacturing sector improves: RBI

According to data from the Reserve Bank of India (RBI), the manufacturing sector is seeing an improvement in demand conditions and contraction in sales was limited to 4.3 percent in the second quarter of the current financial year affected by the coronavirus epidemic.

The fall was due to lockdown

Significantly, the manufacturing sector lost 41.1 percent during the first quarter due to the nationwide lockdown due to Covid-19. Iron and steel, food products, cement, automobile and pharmaceutical companies led the recovery as per the performance of the private corporate sector during the second quarter of FY 2020-21.

What do the figures say?

• According to the data, manufacturing companies sold Rs 5,99,479crore during April-June as compared to Rs 3,97,233 crore in the previous quarter.
• The RBI said the figure was derived from the quarterly financial results of 2,637 listed non-government non-financial (NGNF) companies.
• The RBI said that during this period sales of the IT sector remained steady at 3.6 percent.
• During the second quarter, sales of non-IT companies and IT companies stood at Rs 80,842 crore and Rs 1,01,353 crore, respectively.

It may be noted that the Indian economy affected by the Coronavirus epidemic suffered a major decline of 23.9 percent in the first quarter of the current financial year. In the second quarter, the decline was reduced to 7.5 percent. In the Prime Minister’s Poor Welfare Package, a significant change was made through fiscal measures by focusing on investment spending in self-sufficient India 2.0 and 3.0 from consumption expenditure.