OPEN APP
Home >News >India >State Recovery Tracker: Maharashtra, West Bengal and Rajasthan lead economic recovery among major states

Economic recovery across India continued at a slow pace in February, with key high-frequency indicators showing mixed performance across major states. While goods and services tax (GST) data suggested activity was back to normal, indicators such as vehicle sales and electricity consumption retreated from earlier gains, shows the latest update to Mint’s state recovery tracker.

Maharashtra was the only one among major state economies to record year-on-year growth on each of the three indicators in February. Public movement, a fourth indicator considered in the tracker, also improved marginally to 85% of normal by February-end, despite the return of localized lockdowns in the state to curb a fresh spike in coronavirus cases.

Rajasthan and West Bengal also performed relatively better than other major states, with electricity consumption, GST collections, and mobility improving in February. Karnataka fared the worst, with power use and vehicle registrations declining and GST collections showing only a modest rise. Delhi saw a downturn on all these three counts, and had the lowest levels of public mobility among major states.

Public movement, electricity use, GST collections, and vehicle registrations are the four indicators of economic activity considered in the state recovery tracker. The tracker looks at the 12 largest state economies individually (each having at least 4% share in India’s gross domestic product or GDP), and clubs mid-sized economies (2–4% of India’s GDP) and small ones (1–2% of India’s GDP).

In February, India’s total electricity use increased only 3.5% compared to the same month last year, while GST collections rose 7%. The two growth figures had been 5% and 8%, respectively, in January. Vehicle registrations dropped 15%, a worse showing than the 9% decline in January. However, public mobility rose to about 93% of the pre-pandemic level, crossing the 90% mark for the first time during the pandemic.

In most months since the lockdown, larger state economies have shown a significantly weaker pace of revival than the rest of India. But that gap narrowed in February. The top six states—Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, Gujarat, and West Bengal—recorded only marginally weaker public mobility (92% of normal) and vehicle sales decline (16%) than the national average. Growth in electricity use, however, remained far lower (1.3%) than India’s average.

These six states together account for half of the country’s gross domestic product (GDP), and hence, will be key to India’s economic revival.

Image: Mint
View Full Image
Image: Mint


The rise in electricity consumption, albeit muted, marked the sixth straight month of year-on-year increase. The total consumption across India in February was 104.7 billion units, compared to 101.2 billion units in the same period last year. Much of this growth came from mid- and small-sized states considered in the tracker, which saw a rise of 8.2% and 12.7%, respectively. Among major states, West Bengal (9.3%) and Rajasthan (7.1%) had the highest rise in February, whereas Tamil Nadu (-4.1%) saw the highest decline.

Around 1.47 million vehicles were registered across the country in February, compared to 1.74 million a year ago. Maharashtra (7.4%) and Kerala (5.4%) recorded the biggest y-o-y growth. With more than 25% decline, Gujarat, Karnataka, and Uttar Pradesh were at the bottom of the pile, continuing their trend of the previous month.

At Rs1.13 trillion, GST collections crossed the Rs1.1 trillion figure for the third time in a row. Gujarat showed the highest year-on-year rise (14%), followed by West Bengal (10%) and Rajasthan (10%).

The improvement in public mobility in February more than made up for the post-festive lull in January. Among bigger states, Uttar Pradesh saw footfalls at public locations almost touching pre-pandemic levels, followed by Kerala (97% of normal). On average, medium and smaller states are seeing a higher level of mobility than bigger states. States such as Bihar and Uttarakhand had footfalls going above the pre-pandemic level, whereas mobility was still around 80-85% of normal levels in Delhi and Maharashtra.

Workplace mobility reached 87% of pre-pandemic levels, compared to 81% in January, signalling continuing revival in business activity. Overall, footfalls in workplaces are inching towards the normal levels, Google data suggests.

But these gains are still fragile, and will be hard to retain if the pandemic worsens again. Share markets gave a glimpse of this fear when they lost 2% on 22 February partly in response to fresh spikes in cases in some states. The second phase of the vaccination drive, which began on Monday, will be the biggest glimmer of hope to keep economic outlook positive in the weeks to come.



Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperMint is now on Telegram. Join Mint channel in your Telegram and stay updated with the latest business news.

Close
×
Edit Profile
My ReadsRedeem a Gift CardLogout