August 2020, South Asia

With India unlocking, the worst seems to be over as high-frequency indicators show an improvement from the unprecedented trough the economy had hit in April 2020.

After Prime Minister Narendra Modi announced a nationwide lockdown to arrest the spread of coronavirus, India’s economy trembled in the month of April. While the businesses and industries came to a standstill, the economy struggled for revenue sources. However, the worst may now be over for India and the road ahead will take the economy back on the track. “With India unlocking, the worst seems to be over as high-frequency indicators show an improvement from the unprecedented trough the economy had hit in April 2020,” said the monthly macroeconomic report by the Department of Economic Affairs.

Indicators such as Index of Industrial Production (IIP), Purchasing Managers Index (PMI), power generation, production of steel and cement, railway freight, traffic at major ports, air cargo and passenger traffic, e-way bill generation capturing the inter-state movement of goods, consumption of petroleum products, and motor vehicle registration, have shown improvements, the report added. However, risks on account of rising COVID-19 cases and intermittent state lockdowns remain, the report further said. The future economic recovery of India is believed to be crucially linked to how the COVID-19 infection curve evolves across the states.