annual-report-FY2021

62 COMPANY OVERVIEW BOARD’S REPORT MANAGEMENT DISCUSSION AND ANALYSIS CORPORATE GOVERNANCE BUSINESS RESPONSIBILITY REPORT STANDALONE ACCOUNTS CONSOLIDATED ACCOUNTS Current Year’s review During the period 1 st April, 2021 to 27 th May, 2021, 43,414 vehicles were produced as against 2,656 vehicles and 38,959 vehicles were dispatched as against 2,700 vehicles during the corresponding period in the last year. During the same period 55,904 tractors were produced and 55,682 tractors dispatched as against 8,445 tractors produced and 9,307 tractors dispatched during the corresponding period in the previous year. The world continues to recover from the biggest crisis it has faced in the modern times. Vaccination drives have been initiated across major economies since January 2021 and the pace of vaccination would be critical to support economic recovery in the medium term particularly as one country after another continue to reel under fresh waves of infections and newer strains of the virus. The IMF expects global economic activity to rebound with projections of a 6% growth in 2021 after a 3.3% contraction in 2020. The strength of the recovery varies across countries, depending upon the severity of the crisis, the extent of disruptions and the effectiveness of policy support. The RBI expects India’s economic activity to rebound quite strongly, with a growth projection of 10.5% for the Financial Year 2022. Both, fiscal and monetary policy have lent support to India’s growth recovery in Financial Year 2021 and this support is expected to continue through Financial Year 2022. The Financial Year 2022 Union Budget clearly focused on growth, not just for now but also for the medium term with a laser focus on reviving investment demand. Government Capex has significantly higher multipliers than other forms of spending and would play an important role in substituting and even crowding in private investments in the economy at a time when private sector investment demand is likely to remain subdued. The RBI cut rates, infused significant liquidity and eased regulatory burden to support the economy and has guided that it would continue with the accommodative stance as long as necessary to sustain growth on a durable basis. The ongoing second wave of infections since end- February 2021 with many States imposing localised lockdowns and restrictions and any future fresh waves of infections, like those seen in other major economies, impart downside risks and huge uncertainty to the growth trajectory. However, rapid mass vaccination and timely fiscal and monetary support could provide the necessary backstop to economic activity. Finance Financial Year 2020-21 was an unprecedented year by all means, as the outbreak of COVID-19 pandemic not only resulted in the loss of countless human lives, it also impacted the global trade and commerce severely. Most major economies entered recession during the year, as widespread lockdown measures to contain the spread of the pandemic brought business activities to a standstill. Leave aside interest rates, it was the year in which even ‘oil’ treaded into the negative territory. The global output declined by 3.3% in the calendar year 2020, as per IMF estimates, and most of the major economies, except China, registered a negative growth. In order to support the battered economies, Central Banks came to the forefront, announcing massive rate cuts and stimulus measures, doling out trillions of dollars to pump growth. Policy easing by the Central Banks was timely, swift, significant in scale and most importantly coordinated. Meanwhile, Central Governments juggled to maintain the right balance between containing the spread of the pandemic through strict lockdown measures and re-opening the economies to boost consumption. Unfazed by the subdued business activity, the equity markets across the world roared back from the March 2020 lows and rose sharply during the later part of the year. The gains in the equity markets were driven by prospects of synchronous growth recovery in 2021-22, fuelled by sustained fiscal policy support and further aided by a global vaccination drive. The year 2020 saw global bond yields plunge to record lows amidst large scale rate cuts and accommodative monetary policy stance of Central Banks to aid growth and counter the impact of COVID-19 pandemic. Yields have risen sharply since end-2020 across the globe, led by US, as inflation pressures are rising across. As Bond yields surge, markets are seen to be discounting the Central Banks’ assurances of continued accommodative monetary policy. Commodity prices also witnessed an unabated rally during the year, with most of commodities touching record highs in the pandemic-stricken year. However, this was not before COVID-19 had caused widespread declines in commodity prices in the first half of Calendar Year 2020. The rally since then has been fuelled by a strong economic recovery in China, massive fiscal and monetary stimulus, stronger push towards renewable energy, supply side disruptions and the return of commodities as an asset class amidst economic uncertainty.