cheering the end of 2022

The last calendar year came to an assured end for India’s economy with the twin gains of a big gain on the Manufacturing Purchasing Managers’ Index (PMI) and the number of passenger vehicles sold. The PMI in December rose to a two-year high of 57.8 from November’s 55.7, while car dispatches climbed 23% to a record of nearly 3.8 million units in 2022. The industry’s fortunes indicate easing troubles related to the pandemic, especially as the semiconductor crisis slowed assembly lines. An element of pandemic-repressed demand was being released in the spring in car sales. It also showed a trend towards fancier vehicles as compared to the previous sales pattern. How permanent any changes are, however, remains a matter of speculation. Since the automobile industry contributes a great deal to Indian manufacturing, a high PMI reading comes as no surprise. The challenge is to maintain an industrial momentum even as the world is staring at a recession. Strong local sales will have to offset weak exports. While it is impossible to avoid global factors, they will matter little if the domestic recovery in demand turns out to be more widespread than has been observed so far.