June 12, 2021
  • June 12, 2021

Closures impacted large and small states

By on June 3, 2021 0


Public movements have declined dramatically, reaching the same levels as in May of last year, when the country was under even tighter national restrictions. About 1.2 million electronic consignment notes were generated on average per day, a year-low low and down from around 2 million in April. Electricity use saw its first decline in 2021 from pre-pandemic levels, while vehicle registrations have also fallen 46% on an annualized basis since the same month two years ago.

A two-year deadline is envisaged for electricity and vehicle data, with May 2019 as the reference period. This helps avoid base effects from the artificially depressed levels of May 2020, when most economic indicators collapsed.

In the second half of May, India’s curve of daily covid-19 cases was down, but most states either maintained lockdowns or allowed limited exemptions as they chose to remain cautious. faced with scarce vaccine stocks.

Gujarat, which relaxed its lockdown earlier, fared better than any other major state. Karnataka and Tamil Nadu, where covid-19 cases later peaked, have fallen behind. Delhi had the weakest economic performance and the worst decline in mobility levels among any state despite the curvature of its covid curve in early May.

Locking effect

The Mint State Recovery Tracking looks at three high-frequency indicators – electricity consumption, vehicle sales, and mobility levels – to track the performance of the states’ largest economies (those that represent at least 4% of India’s gross domestic product or GDP). Medium-sized (2-4% of India’s GDP) and small (1-2% of India’s GDP) economies are aggregated for this analysis.

Only 536,795 vehicles were registered in India in May, a sharp drop from 1.8 million in May 2019, the Center’s Vahan dashboard shows. Sequentially, it was 57% lower than the April figures. Delhi, with an annualized drop of 97%, was the worst on this indicator, followed by Karnataka (78%) and Tamil Nadu (62%).

Uttar Pradesh and Gujarat, which far exceeded their second wave peaks, recorded relatively smaller declines – 24% and 35%, respectively.

The country consumed 110 billion units of electricity in May, down 4.6% on an annualized basis since May 2019, according to data from the National Load Despatch Center. The contraction, the worst since December 2020, was seen in all states. Andhra Pradesh (-1.4%), Maharashtra (-1.9%), and Madhya Pradesh (-2.3%) saw a smaller decline than the national average. Delhi, with 17% annualized contraction, experienced the worst decline, followed by Kerala (-10.1%). West Bengal (-8.9%) and Uttar Pradesh (-8.7%) also experienced a considerable drop in their electricity consumption.

Mid-sized and small states experienced a relatively smaller contraction in their electricity use in May.

Mobility is collapsing

Public mobility has declined by around 8% since the end of April, reaching 55% of pre-pandemic levels by the end of May, according to the latest data from Google. With 37% of pre-pandemic attendance in public spaces, Delhi did the worst, followed closely by Karnataka (40%). Mobility was around half of normal levels in Tamil Nadu, West Bengal, Rajasthan, Telangana, Madhya Pradesh and Kerala.

In Gujarat and Uttar Pradesh, public mobility is now close to 70% of normal, despite different durations of confinement.

As the pandemic continues to increase in the south and northeast, these regions continue to see restricted public travel. Parts of Odisha and Himachal Pradesh, considered mid-sized states in the tracker, also reported a significant drop in mobility.

In the second wave, rural areas in small states were hit the hardest in May, with larger states seeing their infections peak earlier. This was reflected in the differential economic impact: the six major state economies, which were lagging behind in 2020, performed similarly to the rest of India in May.

Any national recovery will depend on the performance of the larger states in the coming weeks. The six major states, Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat, Karnataka and West Bengal, contribute over 50% of India’s economic output.

View full picture

Lockdowns hit top 6 state economies as hard as the rest of India

The 2020 lockdown left a long trail of an economic slowdown, but the latest GDP data shows the impact was fading until the second wave hits. Whether the recovery continues will depend on how quickly Indians emerge from the devastating emotional and financial toll of Wave 2. With the lockdown set to continue in key large states, this step could take time.

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