Mumbai, Jan 17 (IANS): India’s overall economic activity remains strong despite headwinds from a rapid rise in Omicron infections, the Reserve Bank of India (RBI) said in its January 2022 monthly bulletin.

“Overall economic activity in India remains strong, with upbeat consumer and business confidence and increases in several high-frequency incoming indicators,” he said.

“On the vaccination front, India has made rapid progress. Regarding the Omicron variant, recent data from the UK and South Africa suggests that these infections are 66-80% less severe, with a less need for hospitalization – the future outlook and financial markets reflect this optimism.”

At the same time, monetary and credit conditions are improving, with bank credit recovering in a gradual but sustained manner, he said.

“As the world entered the new year, the road to recovery in India like the rest of the global economy encountered headwinds due to a rapid rise in infections from Omicron,” the bulletin said.

“Nevertheless, amid optimistic consumer and business confidence and rising bank lending, aggregate demand conditions remain resilient, while on the supply side, rabi sowings have risen above of last year and the normal area.”

Additionally, the RBI said that manufacturing and several service categories remain in expansion mode.

“More recently, expectations that Omicron might turn out to be more of a flash flood than a wave have informed the near-term outlook.”

The RBI stressed that aggregate demand conditions remained resilient. “E-way bill issuance – an indicator of the movement of goods – jumped to 7.2 crore in December, the second highest in its history. This indicates the likelihood of robust commodity tax collection and services (TPS) in January 2022 .

“With a strong recovery in manufacturing and construction, highway tolls climbed 16% month-on-month in December. Electricity consumption rose 4.5% to 110, 3 billion units in December.”

He said the increase in mobility in December 2021 increased fuel consumption, with gasoline consumption exceeding pre-pandemic levels. Additionally, aviation turbine fuel (ATF) and diesel consumption also showed sequential improvement, although ATF still remained below pre-pandemic levels.

On the supply side, the bulletin states: “On the supply side, aggregate supply, measured by gross value added (GVA) at basic prices, increased by 8.6% in 2021-22. , against a contraction of 6.2% per year. one year ago.

“The acceleration in GVA growth was facilitated by robust growth in agriculture, coupled with a recovery in industry and several service components, albeit on a favorable basis.”