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Industrial states hurt more by lockdowns

The article said states with a higher share of agriculture and mining in their gross state value added (GSVA) saw a more resilient economic path than states with a higher share of industry and servicesPremium
The article said states with a higher share of agriculture and mining in their gross state value added (GSVA) saw a more resilient economic path than states with a higher share of industry and services

  • The pandemic lockdowns and mobility curbs had varied impacts across states, with those relying more on farming and mining being more resilient than states with a higher share of output from industries and services, an analysis in Reserve Bank of India’s September bulletin showed

MUMBAI : The pandemic lockdowns and mobility curbs had varied impacts across states, with those relying more on farming and mining being more resilient than states with a higher share of output from industries and services, an analysis in Reserve Bank of India’s September bulletin showed. Such granular analysis at the sub-sectoral level and of economic structure, the article said, emphasized the need to have a differential policy response by the states based on their respective economic structure supplementing national policy interventions.

“The economic structure of respective states has played a significant role in influencing their economic trajectories in the aftermath of covid-19 induced restrictions," an article in the bulletin said.

The article said states with a higher share of agriculture and mining in their gross state value added (GSVA) saw a more resilient economic path than states with a higher share of industry and services. Also, the bulletin said aggregate demand is firm and poised to expand further as the festival season sets in.

“Buoyed by the government’s thrust on infrastructure, gross fixed capital formation (GFCF) recorded a growth of 20.1% in Q1:2022-23. This was also reflected in a sharp acceleration in proximate coincident indicators—steel consumption; cement production; and imports of capital goods. With the growth of imports outpacing that of exports, net exports contributed negatively in Q1:2022-23," it said.

ABOUT THE AUTHOR

Shayan Ghosh

Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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