State Recovery Tracker: UP, Rajasthan, other large states led economic recovery in December3 min read . Updated: 05 Jan 2021, 09:55 AM IST
- Over 1.8 million vehicles were sold across India last month, 10 percent higher than December 2019, vehicle registration data suggests. This is the first time during the pandemic that vehicle registration data has shown a year-on-year increase
India’s economic recovery appears to have picked up pace over the past few weeks, led by the largest states of the country. All four high-frequency indicators of economic activity considered in Mint’s monthly state recovery tracker showed an improvement in December, reversing the brief post-festival slowdown of November.
The six largest state economies recorded about 87% of normal footfalls in public spaces, the best levels so far in the pandemic, shows Google data. These states—Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, Gujarat, and West Bengal—account for half of India’s GDP, and their economic recovery will be key to the country’s economic revival. The rest of India, which contributes the other half of GDP, saw public mobility inch closer to normalcy (90%) by December-end.
Public mobility is one of the high-frequency indicators in the recovery tracker. Three other high-frequency indicators—electricity consumption, goods and services tax (GST) collections, and vehicle sales—are also considered in the tracker. Vehicle sales of the six largest economies grew faster than the rest of the country, the data show. Power consumption in the six largest state economies grew only a little slower than other states.
Mint’s state recovery 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 December, the largest state economies saw faster pick-up in economic activity than earlier. Within the largest state economies, Uttar Pradesh, Rajasthan, West Bengal, and Andhra Pradesh saw faster recovery.
Southern states such as Andhra Pradesh (mobility now at 98% of pre-pandemic levels), Tamil Nadu (91%), and Kerala (97%) saw the biggest jumps in public mobility. Kerala still contributes most new cases every week, but the rate of infection spread slowed down sharply in December as it recorded the lowest compounded daily growth of new cases (-0.7%) among all states.
Overall, the increase in mobility was relatively smaller in northern states, where the winter is getting colder. Punjab (83%), Haryana (88%), and Rajasthan (87%) saw only modest increases in mobility compared to November.
The winter effect showed up in power consumption patterns as well, data from the National Load Despatch Centre shows. Except for Delhi, most northern and central states such as Madhya Pradesh (15%), Rajasthan (12%), Bihar (14%), Punjab (12%), and Uttar Pradesh (10%) witnessed a far higher power demand this December compared to last year. This could be partly due to an increased heating load as the mercury has plunged to multi-year lows in these states. In contrast, electricity usage was lower than last year’s level in several southern states, with Telangana (10%) showing the worst fall among major Indian states. Andhra Pradesh and Tamil Nadu also saw a dip. Compared to the largest state economies, mid-sized (8.6%) and small-sized (7.6%) states saw a higher increase in power consumption.
Over 1.8 million vehicles were registered across India in December, data from the road and transport ministry showed. This is not only the highest figure since April, but also the first time during the pandemic that vehicle registrations have seen a year-over-year growth (10%).
West Bengal registered a growth of 44%, continuing its trend of being an outlier in recovery trends in recent few months. Uttar Pradesh saw the second-highest pace of growth, at 23%. Only three large state economies saw a decline in year-on-year vehicle registrations in December: Gujarat, Delhi, and Karnataka. The smallest state economies saw faster vehicle sales growth (20%) compared to medium sized (1.4%) and the six biggest (13%) states.
At ₹1.15 trillion, India’s GST revenue collections for December were at an all-time high since the implementation of the new tax regime in 2017.
All major states, except Delhi, collected more GST than last December. Rajasthan (16%), Andhra Pradesh (14%), and Gujarat (13%) saw the sharpest year-on-year improvements in their collections.
Overall, the prospects of economic recovery appear to have brightened compared to a few weeks ago. But it is worth noting that several economic indicators continue to flash red still and the sustainability of the ongoing recovery still remains uncertain.