As animal spirits sag, FM's announcements may fall short of spurring growth

Current Affairs

Weakness in India’s investment and consumption activity worsened in July, with economic growth showing little signs of recovery from a five-year low.
A gauge measuring overall activity moved one notch toward weaker territory, as six of the eight high-frequency indicators compiled by Bloomberg fell from the previous month. Car sales slumped the most in almost two decades and latest data showed infrastructure sector output grew at the slowest pace in more than four years.
The weakening came about a month before Finance Minister Nirmala Sitharaman announced a slew of steps to revive Asia’s third-largest economy. While the measures boosted market sentiment, they are expected to fall short of spurring growth.
The dashboard measures “animal spirits” — a term coined by British economist John Maynard Keynes to refer to investors’ confidence in taking action — and uses the three-month weighted average to smooth out volatility in the single-month readings.
Here are the details of the dashboard:
Business Activity

 After contracting in June, India’s purchasing managers index for services rebounded into growth territory in July. The index rose to 53.8 from 49.6 in June, with the upturn in business activity linked to the budget presented in early July and improved work orders. A reading above 50 indicates expansion.Manufacturing activity also picked up, a separate PMI survey showed, pushing the composite index to an eight-month high of 53.9 in July from 50.8 in June...Read More