Source: Economic Times

Indian industry has for the first time in recent months admitted to an improvement in the economy, coinciding with recent pickup in high-speed indicators such as the Purchasing Managers’ Index (PMI) and car sales.

Findings of the CII ASCON Industry Survey for the first quarter of fiscal 2016 indicate a reversal in activity, from slowdown to a modest recovery, adding to evidence that the economy is looking up despite many challenges.

According to the survey, 16.1 per cent of 93 sectors observed reported over-20 per cent growth in the April-June quarter, compared with just 7.1 per cent out of 111 sectors a year earlier

The survey tracks growth across sectors through responses collected from sectoral industry associations.

“What is especially significant is that there are fewer sectors anticipating negative growth and there has been a significant and perceptible positive movement in percentage points recorded by many of the sectors which were in moderate and negative growth category a year ago,” Naushad Forbes, chairman of the CII Associations’ Council (ASCON), said in a news release. The share of sectors recording lower activity has fallen to 23.6 per cent from 26.9 per cent in the first quarter last year. Other monthly indicators also seem to suggest that a recovery is taking shape. The manufacturing PMI rose to a six-month high in July, while the services PMI bounced into the positive territory after two months of contraction.

The country’s biggest car manufacturer, Maruti SuzukiBSE 1.03 %, posted 20 per cent higher sales in July, while Ashok LeylandBSE 0.63 %, the second biggest commercial vehicle maker, posted a 40 per cent increase in volume for the same month. The revival has largely been driven by rapid government spending in the new fiscal making up for lack of private investment.