A number of real economy indicators turned the corner in June, after slipping in May due to the impact of the second wave of Covid-19 infections. Not all indicators improved though, which elevated demand for rural work, in particular, suggesting that pain in the economy persists.
The Nomura India Business Resumption Index, a weekly tracker of the pace of economic activity normalisation comprising of mobility, power demand and labour force participation rates, indicated that business resumption is rebounding quicker from the second wave than from the first.
The index picked up for a sixth consecutive week to 91.3 for the week ending July 4, from 86.3 the previous week, according to a research note by Nomura on Monday. With that, it’s now only 8.7 percentage points below pre-pandemic levels and 3.6 percentage points below pre-second wave level, the note said.
The State Bank of India‘s business activity index also rose to 91.8 for the week ended June 28, from 78.3 the preceding week. Various indicators show improvement in economic activity in June, with robust recovery visible in weekly vegetables’ arrival and revenue collections by regional transport organisations. There is, however, a slight dip in the labour participation rate, wrote Soumya Kanti Ghosh, group chief economic advisor at the SBI, in a research note.