The fairly swift recovery following the second wave of the pandemic will likely gain momentum in the festive season ahead. However, even as tax collections exceed expectations and high-frequency indicators show a pick-up, employment numbers remain worrisome. Headline unemployment has fallen in September to just 5.89 per cent but urban joblessness is hovering around 8 per cent; CMIE estimates the net cumulative increase in employment in the past 12 months at just 44,483. That's just 0.044 million on a base of 400 million jobs. Hopefully, the recovery process won't lose steam and the supply-side issues will be sorted out. While exports are surging, an analysis by HSBC shows high-skill exports — mobile phones, machinery, pharmaceutical products, and IT services — have gained global market share, while low-skill and labour-intensive exports — textiles and agriculture — have been weak. It is good news curbs on expenditure have been lifted and that several central government departments can now spend from their allocated budgets starting October; the curbs had limited spending by some departments to just a fifth of the FY22 outlay. The other big concern is the capex cycle: An analysis by Nomura shows that while FY23 may see some impact of deferred investments, originally planned during FY22, the phasing profile of envisaged capex reveals persisting near-term risks to the private investment outlook. With inputs from Financial Express
