India’s Top 500 Companies 2019

INDIA’S TOP 500 COMPANIES 2019 72 The Indian economy exhibited resilience during FY18 and FY19 backed by upturn in investment. Inflation remained confined to the RBI’s target range, led by lower food inflation. The credit growth also returned to double digit level from a historic low of 4.4% in Feb-17. Thus, the macro concerns that largely prevailed in FY17 about the sluggish investment and moderation in bank credit waned slightly in FY18-FY19. While there were these positive developments, the economy had to contend with some risks on domestic and external front. The private consumption demand witnessed some weakness on account of income growth slump especially in the rural areas. On external front, the firming up of the global crude oil prices coupled with depreciating rupee in the second half of FY19 led to widening of current account deficit. Indian economy witnessed a turn around in Q2 FY18 after witnessing a below 6% growth in the previous quarter Indian economy turned around in Q2 FY18 after witnessing a plunge in Q1 FY18 Manufacturing sector woes disrupt revival in industrial production growth 0 2 4 6 8 10 12 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 % total GVA Industry Services -2 0 2 4 6 8 10 12 % Manufacturing General IIP Source: MOSPI Indian economy witnessed a turnaround in Q2 FY18 aided by some recovery in industrial sector GVA. However, recovery in industrial GVA could not gain further momentum in FY19. Both industry and agriculture sector witnessed tepid growth during FY18 and FY19 on account of below normal monsoon and sluggish domestic demand. Private consumption demand that had historically been the key growth driver for the Indian economy remainedmuted due to distress in the rural economy. The below normal monsoon and falling prices of agricultural produce, adversely impacted farmers’ income, which in turn curbed spending by rural households. The demand tremors weremainly witnessed in sectors like FMCG, automobiles (passenger cars & two wheelers) and agriculture equipment (tractors). The relatively tight liquidity conditions in the second half of FY19 also weighed on the consumption demand. Nonetheless, substantial increase in government final consumption expenditure during FY18 cushioned the downside impact on aggregate consumption demand. Economy Update Dun & Bradstreet