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On 21 October, India administered its one billionth dose of the covid-19 vaccine, giving a much needed boost to the country’s confidence amidst stronger signs of economic normalcy. A raft of economic data such as goods and services tax collections, purchasing managers’ index, and trade numbers also showed an upward trend. However, the pace of recovery varied across states last month, the latest update to Mint’s state recovery tracker shows.

Among major states, Maharashtra led the performance on high-frequency indicators such as electricity demand and vehicle registrations, whereas Uttar Pradesh and Tamil Nadu were the laggards. Delhi continued its poor performance on both indicators, and also on public mobility. Kerala also fared poorly on electricity demand and vehicle sales, but reported high mobility relative to pre-pandemic levels.

Mint’s state recovery tracker looks at three high-frequency indicators—electricity use, vehicle sales, and mobility levels—for which state-wise data is available by month-end. In the absence of more data, these indicators help us assess the recovery progress of various state economies. The tracker looks at the 12 largest state economies individually (those with at least 4% share in India’s GDP), apart from mid-sized economies (2-4% of India’s GDP) as one group and small ones (1-2% of India’s GDP) as another.

Nationally, despite the shortage of coal, electricity demand recorded a robust growth over the pre-pandemic period in October, whereas vehicle sales plateaued amidst global supply constraints. Public mobility, which had already surpassed pre-covid levels in September, surged even further as the festive season took over.

Mixed Recovery

The recovery finds encouragement from a continuing decline in the covid-19 outbreak. The daily infection count reached its lowest since February. Kerala showed a declining trend, too, but still accounted for over half of all new cases reported in India. West Bengal was the only major state to see a rise in cases, albeit modest.

However, despite the 1-billion-doses landmark, the month saw fewer jabs being administered than September even as inter-state inequities remained. Gujarat, Delhi and Kerala have delivered more than 1,000 doses per 1,000 people, whereas Uttar Pradesh and Bihar have just crossed 500.

At 114 billion kWh, the cumulative electricity consumption during the month was on par with September, growing an annualized 7.5% over the corresponding month two years ago. With 12.5% growth, Madhya Pradesh once again reported the greatest improvement among major states, followed by Andhra Pradesh (9.6%) and Telangana (9.4%). Tamil Nadu and Kerala (3.7%) fared the worst, closely followed by Delhi and West Bengal.

The same month of 2019 has been considered as the base to assess electricity use and vehicle registrations to avoid the artificially depressed figures of 2020.

About 1.37 million vehicles were sold in October, up 5% sequentially, but 14% lower (annualized) since October 2019, data from the Centre’s Vahan dashboard showed. West Bengal was the only state to report growth. Delhi, with a 23% decline, fared the worst. Gujarat (-21%) and Rajasthan (-20%) were not far behind among major states. Mid-sized states performed worse than large and small states.

Festive Surge

Footfall data recorded by Google at retail locations, parks, public transit stations, and workplaces has provided a gauge into normalcy throughout the pandemic. By the end of October, footfalls at such locations were 1.1 times the levels recorded by Google in the five-week baseline period in early 2020. Mobility had first crossed the pre-covid level in September.

Uttar Pradesh reported the highest mobility levels among large states (1.2 times), with small-sized states making similar strides. Delhi and Karnataka are the only major states where mobility remains below the baseline level.

The district-level mobility data exhibits wide variations across India---from 0.6 times to 2.1 times the baseline. Around 90% districts are now recording above-normal mobility, but major exceptions lie in north-eastern states.

The pace of broad-based economic recovery in India hinges the most on the states that contribute the most to national GDP. In October, the six states that account for half of India’s economic output---Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat, Karnataka and West Bengal---showed quicker recovery than the rest of India on mobility and vehicle sales. However, they fell behind a little on electricity consumption figures.

Large States show slightly different recovery
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Large States show slightly different recovery

While the festive cheer has given a nudge to economic recovery in recent weeks, parts of the economic engine are still struggling to get going, the tracker shows. All hopes rest on India’s ability to fight off the global supply choke points that increasingly threaten to reverse the gains in demand recovery.

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