Even though mobility advanced across the country in September, and vaccination coverage improved, most states showed muted trends on other indicators such as electricity use and vehicle sales, shows the latest update to Mint’s state recovery tracker
India’s prospects of a sustained economic recovery got a sniff of hope in September as public mobility scaled pre-pandemic levels for the first time. Other high-frequency indicators such as the PMI and GST e-way bills are also looking upward. However, the pace of recovery no longer appears to be broad-based across states the way it was in August, the latest update to Mint’s state recovery tracker suggests.
Electricity demand recorded a growth over 2019 figures for the third consecutive month, but the pace was muted. Vehicle registrations barely showed an upward trend, and are yet to reach pre-pandemic levels. This breaks the flow of the swift recovery track of July and August, with all hopes now tied to the upcoming festival demand.
Maharashtra and Karnataka were the better performers among major states on both indicators, while West Bengal, which had dominated the league table for several months, fared the worst. Uttar Pradesh, the quickest to rebound after the second covid-19 wave, fared rather poorly, despite high mobility levels and the lowest caseload.
Delhi continued its poor performance, and was a laggard on electricity use, vehicle sales, as well as mobility. Mid-sized states—Haryana, Punjab, Bihar and Odisha—reported far worse figures than the largest states.
Mint’s state recovery tracker looks at three high-frequency economic indicators—electricity use, vehicle sales, and mobility levels—to keep track of the performance of the largest state economies (those with at least 4% share in India’s gross domestic product or GDP). Mid-sized economies (2-4% of India’s GDP) and small ones (1-2% of India’s GDP) are aggregated for this analysis.
Defying speculation about a third covid-19 wave hitting India around this time, fresh infections dropped further in September from an already-low figure. Kerala continued to be a stubborn outlier among major states, and by the end of the month, was recording 19 times more infections adjusted for population than the second worst state.
The newfound vaccination push inspired confidence among businesses and consumers for much of early September. However, the pace has slowed since peaking on 17 September: Fewer doses were administered last week than a month ago.
In total, 114.5 billion units of electricity were consumed in September, a 2.7% annualized increase over the corresponding month two years ago. However, this was 12% lower sequentially. Madhya Pradesh (10.9% growth) reported the greatest improvement among major states, followed by Andhra Pradesh (7.1%) and Maharashtra (5.6%). Delhi fared the worst, with a decline of 6.8%. Rajasthan and West Bengal were the only other major states to see a contraction.
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.
A total of 1.3 million vehicles were sold in September, down 6% sequentially, data from the Centre’s Vahan dashboard showed. This was also an annualized 7% lower than September 2019. Gujarat and Karnataka were the only two to report a growth. West Bengal and Delhi, with a 15% decline, had the poorest sales performance among major states. Medium states fared even worse.
Mobility data recorded by Google through smartphone users has been a key leading indicator to gauge the level of normalcy throughout the pandemic. Nationally, footfalls at public locations surpassed pre-pandemic levels for the first time, albeit with significant variation across states. Among major states, Kerala, with 114% of pre-pandemic footfalls, recorded the highest mobility levels, closely followed by Uttar Pradesh (111%). Delhi, despite recording fewer than 50 cases a day consistently, recorded the lowest mobility levels (88%) among major states.
A vast majority of districts across India are now reporting above-normal mobility levels, the Google data shows. Although the caseload has ebbed in most parts of north-eastern states barring Mizoram, mobility in the region is still well below the pre-pandemic levels.
In September, the six largest state economies—Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat, Karnataka and West Bengal—were a little ahead of the overall national performance on the tracker. This augurs well for national recovery since these six states make up 50% of India’s economic output. Last year, these six states had lagged the national figures for several months, and this had weighed on recovery.
Ten states—including Delhi, Gujarat, Madhya Pradesh, Rajasthan, Uttar Pradesh and West Bengal—had reported covid-19 outbreaks during last year’s festival season even when the national first wave was on a decline. The same risk is present this time, too, and it could be a roadblock to sustained recovery. A determined push on the vaccination front will be a must even as businesses keenly await the festive demand boost.
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