Finance minister Nirmala Sitharaman says the Modi govt is starting to see green shoots of recovery in a pandemic-battered economy in some high frequency data – and surprisingly suggested that its optimism stemmed from the PMI data among other indicators.

The truth is that the PMI for both manufacturing and services are in contraction and have been for the past few months.

Sitharaman might be referring to the fact that the PMI number for manufacturing in June clawed back to 47.2 from 30.8 in the previous month. But any number below 50 is still a contraction.

The PMI for manufacturing has been in contraction for three months – April (27.4), May (30.8) and June (47.2).

Meanwhile, Nomura has forecast 6.1 per cent contraction this fiscal if economic activity remains weak.