Patchy unlocking: After uptick in economic activity and public mobility, growth beginning to plateau

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July 12, 2020 5:57 PM

While public mobility in Kerala, Himachal Pradesh, Bihar and Punjab went up vis-à-vis during the lockdown period, Maharashtra, Delhi, Gujarat and West Bengal saw slower recovery.

Overall payment transactions value declined by 46 per cent in April over March, as per RBI data.

Even as there has been an uptick in India’s economic activity and public movement with the beginning of the unlock exercise, states with higher rates of infection are witnessing the two being curtailed, The Indian Express reported. The trend is visible from June across various data sets studied by the newspaper: mobility indicators at workplaces and retail areas, electricity usage, unemployment rates and stalled projects’ progress. The patchy unlock has also been reinforced by Google footfall data across six common location categories including retail and recreation, parks, public transport, workplaces, supermarket and pharmacy, and residential areas as per GPS signals.

The data available since mid-February showed that whether the number of visitors or footfalls have increased or decreased at each of these location types for every day in comparison to normal days. While public mobility in Kerala, Himachal Pradesh, Bihar and Punjab went up vis-à-vis during the lockdown period, Maharashtra, Delhi, Gujarat and West Bengal saw slower recovery. The footfall data is lower in Tamil Nadu as well as the cases increased.

Mobility at retail and recreation areas for July 5 was 68 per cent lower than from the baseline period of January 3 – February 6. In mid-April, the gap was of about 87 per cent. While it improved slightly to 55 per cent in mid-June, the mobility trend gap increased to more than 60 per cent in June end vis-à-vis the baseline period, as per the data.

At workplaces, mobility fell 69 per cent from mid-April baseline. This recovered to a 26 per cent gap in early-June only to widen in the range of 33-36 per cent. With respect to electricity consumption, there was a noticeable growth in demand after lockdown guidelines were relaxed in May-end but the trend line has dropped significantly and remains below last year’s levels, as per the data from according to data from grid operator Power System Operation Corporation (POSOCO). The electricity usage has remained around 3,600 GWh of average level in the last week of June in comparison to 3,900 GWh during the same period last year, with industrial load continuing to be sub-optimal, The Indian Express cited a POSOCO official as saying.

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Moreover, the hiring activity has also remained low. As per job portal’s Naukri JobSpeak Index – a monthly index for hiring activity based on job listings, hiring rose by 33 per cent month-on-month in June (sequential improvement over May) but remained 44 per cent lower than the same period last year. The fall in hiring activity was highest for Mumbai at 56 per cent and Delhi at 54 per cent.

Coming to the number of stalled projects in India, CMIE data revealed that 569 large projects worth Rs 8.7 trillion were recorded as being stalled in the last week of March 2020 due to the lockdown. 259 projects out of that worth Rs 4.9 trillion have begun project implementation again by June.

Payment transactions also declined significantly in April. Overall transaction value declined by 46 per cent in April over March, as per RBI data. Transactions via different banking channels including cheques, NEFT and RTGS, and ATM withdrawal contracted between 26 per cent and 71 per cent in April over March.

This plateauing across all these areas has hit the government’s revenue channels. There was more than 30 per cent fall in direct taxes in the first quarter while GST revenues declined by 41 per cent. Though monthly GST collections went up in June to Rs 99,940 crore from Rs 32,394 crore in April, the growth has been partly because of the delayed payments due from previous months after the government had extended the deadlines.

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