An Optical Illusion
India's industrial output witnessed a stellar growth of 22.4% in March after contracting in the previous two months. The Index of Industrial Production (IIP) in January had contracted by 3.4%. It had managed to recover gradually in February and contracted by 0.87% during the month.
The huge spike in March figures looks optically impressive. However, there is nothing much to cheer about as it has come on a low base.
Given the lower base effect of last year, IIP data of March 2021 is not comparable to last year. Its comparison with March 2019 data shows a moderate contraction of 0.5%.
IIP data of April 2021 will be crucial to assess the impact of the second COVID-19 wave as compared to the same month last year.
Cryptocurrencies: The End Game?
The Reserve Bank of India has once again exhibited its discomfort with cryptocurrencies. And asked lenders to cut ties with cryptocurrency exchanges and traders.
The RBI has suggested banks stay away from cryptocurrency due to its highly speculative nature. With this RBI has maintained its tough stance against cryptocurrencies.
India is expected to craft a new law to ban cryptocurrencies. However, crypto exchanges keep adding thousands of new investors into the system every day, lured by the exorbitant gains reported. These investors could be in for a crash lending and lose out on their life savings if the crypto bubble bursts abruptly.
Easing Curbs on COVID-19 Supplies
The Indian government has relaxed the curbs on procurement of all COVID-19 related supplies. The mandatory local content requirements are done away with. Now all ministries are allowed to float global tenders for less than Rs 200 crore for such supplies. These exemptions shall be applicable till September 30.
Even those countries which do not allow Indian companies to participate in their governments procurement are also allowed to participate in the process.
India is in desperate need of critical medicines, medical devices, and vaccines. And this move reflects the severe shortage that the country is facing amid the raging second wave. India's daily case counts continue to remain above the 3.5 lakh mark per day, though it has fallen from its peak of ~4.0 lakh cases on a daily basis.