Login With Google
RBI finds no evidence of destocking by companies despite note ban, GST
Why it is in news?
- Despite demonetisation and implementation of the Goods and Services Tax (GST), there was no evidence that listed private sector manufacturing firms have de-stocked or liquidated their inventories, the Reserve Bank of India (RBI) said.
- In the report, analysing the performance of listed non-government, non-financial firms the RBI said these firms posted a turnaround in 2016-17 mainly due to the improved performance of the manufacturing sector, even as losses incurred by the companies in the services sector (other than in information technology) operated as a drag on the aggregate performance.
- The turnaround has extended into 2017-18.
- While the first quarter of the previous financial year saw contraction in operating profits for the corporate sector due to moderation in sales growth coupled with increase in expenditure, performance revived in the second quarter due to moderation in input costs.
- Demand conditions in the manufacturing sector further picked up in Q3:2017-18 as evidenced from the sales growth and this improvement was not attributable to favourable base effects.
- The report said the revival in nominal GVA (gross value added) growth of the manufacturing sector in third quarter of 2017-18 was supported by steady growth in primary, intermediate, construction goods and consumer durables.
Source
The Hindu