State Recovery Tracker: West Bengal shows pick-up in economic activity, Karnataka and Delhi lag

  • Public mobility in the six largest state economies of India was 79% of normal levels in October, the best level since March, shows Mint’s state recovery tracker

Tanay Sukumar, Pooja Dantewadia
Updated3 Nov 2020, 09:41 AM IST
Public mobility is one of the high-frequency indicators in the recovery tracker.
Public mobility is one of the high-frequency indicators in the recovery tracker.(PTI)

The recovery in economic activity is gradually becoming more broad-based, with high-frequency indicators across Indian states picking up pace, Mint’s state recovery tracker shows.

West Bengal, the sixth biggest state economy, reported the most visible gains in the Durga Puja month. So did Madhya Pradesh, Gujarat, and Maharashtra to some extent, as the coronavirus outbreak in these states calmed further.

Public mobility in the six largest state economies of India reached 79% of pre-pandemic levels in October, the highest since March. These states—Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, Gujarat, and West Bengal—will matter the most in economic recovery as they make up half of India’s economic output.

The rest of India, which contributes the other half of GDP, recorded 94% of the normal footfalls at public places, Google mobility data shows. This was also the best level since March, even though these states continued to expand their share of coronavirus cases in India.

Graphic: Mint

Public mobility is one of the high-frequency indicators in the recovery tracker. Three other indicators, which serve as proxies for economic activity—electricity consumption, goods and services tax (GST) collections, and vehicle sales—are also considered in the 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).

Mobility rose across India in October as the coronavirus spread appeared to slow down in most parts. Even in West Bengal, which saw one of the more prominent outbreaks of the month, mobility recovered to 86% of the pre-pandemic level. In poll-bound Bihar, mobility is the closest to normal times among major states, followed by Uttarakhand and Assam.

However, Kerala witnessed a muted recovery as it struggled with a persisting second wave of the pandemic. Delhi, Maharashtra and Karnataka also lag on this indicator.

For the second straight month, electricity consumption exceeded the year-ago level (by 12%) in October, data from the National Load Despatch Centre showed. Madhya Pradesh, Rajasthan and Gujarat led the way, consuming 39%, 22% and 17% more power compared to year-ago levels. Telangana was the furthest behind, with a 6% year-on-year drop, followed by Kerala and Delhi (nearly at par). Mid- and small-sized state economies continued to fare better than larger states on this count, with 14% higher power usage than the year-ago period.

Around 1.4 million new vehicles were registered in October, 26% lower than the year-ago count, shows data from the road transport ministry. Though the highest in seven months, the year-on-year growth is lower than what it was in September.

West Bengal was the only state where vehicle sales surpassed the year-ago levels in October, by a massive 63%. Among other states, Tamil Nadu (4% behind) and Assam (5%) were the closest to the year-ago vehicle registration numbers. Gujarat (61%) and Karnataka (42%) were the furthest behind.

All major states, except Delhi, reported an increase in their goods and services tax collections in October. Andhra Pradesh collected 26% more GST than a year ago, and Rajasthan 22%. Small-sized states on the tracker reported a 20% improvement. However, the recovery on this indicator was muted for three of the largest state economies—Maharashtra, Uttar Pradesh and Karnataka.

A district-wise analysis of Google mobility shows that people in peninsular India are less likely to step out of homes as compared to other parts of the country. This phenomenon is most pronounced in Maharashtra, India’s worst hit state, and Kerala, which has struggled with a second wave of the coronavirus since Onam festivities in August.

In Chhattisgarh, another recent hotspot, an improvement in the caseload helped mobility recover remarkably in October, from 47% of pre-pandemic level at September-end to 80% as of 25 October.

The slowdown in the coronavirus pandemic for over a month and a half has given a much-needed fillip to economic activity across India. But there are risks to the recovery. As Kerala’s example shows, states that are reporting fewer cases now can see a renewed resurgence, especially with festivities underway in many parts of the country. The trajectory of the pandemic in the coming weeks will determine the sustainability of the ongoing economic recovery.

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First Published:3 Nov 2020, 09:41 AM IST
HomeNewsIndiaState Recovery Tracker: West Bengal shows pick-up in economic activity, Karnataka and Delhi lag

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