Against the emerging gloom and doom scenario, the government came out with production linked investment schemes for incentivising fresh investments, raising production, creating employment opportunities and substituting costly imports

Boost from infrastructure

Besides these policies, certain sectors like metals, steel, aluminium and copper were also helped by the large sums earmarked for infrastructure by the USA, EU and UK, besides India. The hopes of global metal companies benefitting from the heightened demand saw the prices of metals remaining at elevated levels from April onwards. This saw several companies, which had continued to build capacities over the last few years, benefitting considerably.

Tata Steel, with its plants in the UK and higher capacities from takeovers of companies in NCLT was one big beneficiary, with the company declaring a record high profit during the year. Hindalco benefitted from the takeover of Aleris Corporation by its subsidiary Novelis for $2.8 billion in April 2020 to become one of the largest aluminium producers. For metals 2021 will go down as a dream year with all major producers like JSW, Jindal Steel, Tata Steel, SAIL, Hindalco, Vedanta, Hindustan Zinc and Hindustan Copper benefitting from the elevated demand and heightened prices for the better part of the year.

Cement was also one sector which put up a good performance in the post pandemic year. High liquidity and the low interest rate regime also gave rise to higher demand for housing. Amongst the other sectors which benefitted in 2021, speciality chemicals were a big beneficiary.

In fact, in 2021, one redeeming factor for manufacturing was the interplay of both investment demand thanks to huge outlays by the government and consumption demand. This is expected to spill over into 2022 which could see the manufacturing sector riding high. While the new variant of the virus is causing fear of it again spreading across the country, the return of hope has made all the difference in the minds of the people.

One school of thinking is that it will not be as bad as the second wave, it will not be serious and could be treated at home. While it is too early to speak about the repercussion of another wave of the epidemic sweeping the country, hope still runs high. One circle is over, the new one will begin.