By Sonal Varma & Aurodeep Nandi
How strict are the lockdowns? The Oxford Stringency Index for India has risen to 69.9 as of April 13 from a current low of 57.9 at the start out of the month, reflecting the pan-India spread of the lockdown (see graphics). This is significantly less stringent than at the height of the lockdown final April (one hundred) and is comparable to the state of the lockdowns in December. The more extensive Oxford Containment and Health Index—which captures lockdown measures as effectively as testing, vaccination and other healthcare responses—is trending at greater levels. Despite a significantly more extreme second wave, a significantly less stringent lockdown is constant with the government’s approach to concentrate on testing and vaccinations this time, while we do count on more states to impose restrictions in the coming weeks.
The Nomura India Business Resumption Index (NIBRI)—our weekly tracker of the pace of financial activity normalisation—has dipped to 90.4 for the week ending April 11 from 93.7 in the preceding week (see graphics). This suggests that the economy is at present tracking about 9.6 percentage points beneath its pre-pandemic regular.
Mobility requires a hit
A crucial explanation behind the fall in the NIBRI is deterioration in mobility indicators in response to the lockdowns and cautious customer behaviour. Google Retail & Recreation and Workplace Mobility Indicators have fallen by 5.9 percentage points and 2.7 percentage points from the preceding week, even though the Apple Driving Index has dropped by a whopping 8.4 percentage points (see graphics). As of April 12, the Apple Driving Index dropped sharply across cities, specifically in cities in Maharashtra (Mumbai and Pune).
The Traffic Congestion Index (TCI), collected by Traffic Index, also shows a comparable fall in website traffic levels to about 10 as of April 13, down from 16 a month earlier, while above the levels (of about 2) a year earlier.
Mixed signals on non-mobility indicators
As of April 13, railway passenger revenues dropped by about 25% from a month ago, suggesting men and women have reduce back on their travel plans, while this is improved than final April, when revenues dipped to zero. Railway freight revenues, which had held up comparatively effectively till finish-March, have also began to witness a correction in April—down 7.7% from a month ago. GST E-Way Bill collections in the 1st two weeks of April have declined by about 38% compared with the corresponding period in February-March (on typical), reflecting significantly less movement of goods each intra-state and inter-state.
Encouragingly, energy demand has held up, increasing 9.9% (versus its two-year-ago level) as of the week ending April 11, and typical every day peak energy demand across most states in the 1st 12 days of April continues to show an uptick from March levels (see graphics). Finally, the labour participation price dipped marginally to 40% for the week ending April 11 versus 41.2% in the preceding two weeks, even though the unemployment price rose, but therefore far neither are as severely impacted as final April.
Economic outlook
Both the pandemic predicament and its effect on development continue to evolve as a greater rise in instances is escalating public and private proclivities towards restricted mobility. The crucial concern is when decrease mobility translates into decrease outturns in other true financial development indicators. At the margin, the true-time tracking of the economy this week reveals deterioration from final week, when significantly of the slowdown was restricted to mobility indicators (‘India: The Second Wave is Unlikely to trip up the Growth Recovery’, April 1, 2021). Overall, we count on a loss of sequential momentum in Q2-2021, even although we count on the medium-term development upcycle to stay intact due to ongoing vaccinations, the lagged effect of simple monetary situations, frontloaded fiscal activism and powerful international development. We retain our not too long ago downgraded projection for FY22 (year-ending March 2022) GDP development at 12.6% year-on-year from 13.5% previously.
(Excerpted from Nomura’s Asia Insights Global Market Research dated April 14, 2021)
Authors are investigation analysts, Nomura