India's Economic Recovery Weakens Post Diwali, Gujarat Hit Worst

The pandemic caused the global economy to crash. India too was badly impacted but the festive seasons helped the nation to speed up its economic recovery on top gears. However, post Diwali, the scene seems different. The nation’s economic recovery has again faced a setback post November, and its further worsening due to the fear of second wave of COVID-19. Mint’s state recovery tracker mentions that the slowdown post mid-November was most evident in high-frequency indicators such as mobility and power demand.

According to Google data, public mobility that reached 84 percent of pre-COVID levels by Diwali on 14th November slipped to 79 percent in the next two weeks. States like Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, Gujarat, and West Bengal that make up half of India’s economic output matter the most in the recovery, while the rest of India recorded 81 percent of the normal footfalls at public places by November end. However, apart from few states including Karnataka and Kerala, the pace of economic recovery weakened in most large state economies, with Gujarat being the most affected, as per Mint’s state recovery tracker.

The state reached 88 percent of pre-pandemic level of public movement by the festival, but its November-end figures were even bad than September, which was nearly 70 percent. Bihar and Uttar Pradesh were the only two major states where mobility improved in the second half of the month.

"The state reached 88 percent of pre-pandemic level of public movement by the festival, but its November-end figures were even bad than September, which was nearly 70 percent"

However, as per National Load Despatch Centre, power demand increased at the slowest pace since September. But the demand surged three percent in November compared to last year’s level, with the first half of the month witnessing an eight percent rise in power demand than the year-ago. However, it slipped below minus one percent in the second half of the month. Andhra Pradesh, West Bengal, Gujarat and Tamil Nadu had the steepest drops in their power demand in the second half of November compared to the first half.

When it comes to vehicle registration, the trend varies across states. Nearly 1.8 million new vehicles were registered in November, which was the highest in the seven months, as per road transport ministry data. However, the deficit against the year-ago remained at 21 percent negative. Two states, Kerala and Delhi, recorded the best vehicle sales figures compared to last year, despite the fresh coronavirus outbreak.

GST collections in major states like Maharashtra, Uttar Pradesh, Karnataka, and Kerala fell below last year’s mark in November despite witnessing a rise in October. While Maharashtra collected six percent less GST than a year-ago, Kerala had seven percent low GST collection. But states like Andhra Pradesh (12 percent), Gujarat (11 percent) and Tamil Nadu (10 percent) showed sharp improvements in GST collections.