Economic activity at March 2020 levels: Research agency

Electricity generation, rail passenger traffic, grocery and pharma-related mobility helped economic activity crawl up to within kissing distance of the activity in the pre-pandemic levels of March 2020, said research agency QuantEco. The agency’s daily activity and recovery tracker index (DART) indicated the ninth consecutive week of recovery in economic activity with the index climbing to 99.9, a whisker away from the baseline level of 100 as in March 2020, said the report of the agency for week ending July 18.

The index is now about 3.5% below February 2021 peak but there remains significant unevenness in recovery at the sub-indicator level, the report noted.

Mixed indicators

As the economy opens up gradually after the easing of restrictions in different states, there are mixed indicators of performance in various sectors of the economy.

Though electricity generation, rail passenger traffic, grocery, pharma and park-related mobility rose in the previous week, the agency mentioned that E-way bills, traffic congestion level, rail freight, online restaurant searches and mobility related to transit and workplace remained at significantly down.

E-way bills

Both E-way bills (that are required for commercial movement of goods worth more than Rs 50,000) and rail freight are crucial indicators of transport of goods across regions for consumption.

Unemployment, Apple driving mobility and movement for retail/recreation purposes were slightly down.

Threat of variants

However, QuantEco’s economist Yuvika Singhal said that going ahead the “threat of virus variants is likely to imply a more drawn-out recovery in consumer sentiment and private demand, at least in Q2 FY22”.

The agency also expressed concern at the drop of daily rate of vaccinations that touched a record 8.5 million on June 21.

Vaccination rate

“Notwithstanding the average daily pace of vaccinations improving to 4.2 million last week from 3.5 million previously, it remains below the peak of 6.2 million recorded in last week of June 21. We estimate that a pace 6 million doses/day could allow single-dose population coverage to rise towards 60% before 2021 end – a critical prerequisite for a stronger sequential growth rebound to take shape Q3 FY22 onwards led by demand biased in favour of ‘experiences’ more than goods (in line with global experience),” the report noted.

Unemployment

Rate of unemployment — pan-India, rural and urban — as monitored by Centre for Monitoring Indian Economy came down from its double-digit peaks and settled in the 7-8% zone.

In the week ending July 18, the 30-day moving average of unemployment rate pan-India reached 7.41%. The rate for urban and rural sectors hovered in the 7%-9% range.