Business activity in India rose for the second consecutive week, surpassing the pre-pandemic level, for the first time since the onset of the COVID-19 disruption in March 2020, a Japanese brokerage firm Nomura said on Monday, August 16, 2021.
Business activity breaks pre-pandemic level, NIBRI rises to 101.2
The Nomura India Business Resumption Index (NIBRI), which measures activity every week, with pre-pandemic levels as a base, rose to 101.2 for the week ended August 15, 2021, from 99.6 last week.
This is the first time that the business activity has surpassed the pre-pandemic base. The index level declined sharply in April last year, immediately after the national lockdown, and rose sharply to be very close to the pre-pandemic levels of March 2020. However, the second wave and the ensuing local lockdown hit it again until it increased after the infection subsided.
NIBRI crossed 100 mark in three months after second wave
The recovery from the second wave of Covid-19 has been very rapid. Nomura said, “It took about ten months for NIBRI to crawl towards the 100 mark after the first wave of COVID-19, but it took less than three months to cross the 100 mark after the second wave”. This indicates in the next quarter and further, there will be rapid positive growth in India.
Third-quarter of the current financial year will see rapid growth
Nomura said the sustained growth in NIBRI during July-August suggests that a strong-sequential rebound is likely in the third quarter. It expects GDP growth to contract at 4.3 per cent sequentially in the June quarter but rise 29.4 per cent year-on-year. In 2021-22, GDP is expected to grow at 10.4 per cent in real terms, as against a contraction of 7.3 per cent in the previous year.
Nomura India Business Resumption Index (NIBRI)
The NIBRI combines the Google Mobility Indices, power demand and labour force participation rates, driving mobility from Apple. NIBRI series considers February 23, 2020, as the base for all the series and subsequent data entries have been indexed to it.
During the week under review, Google Mobility Indicators continued their uptrend with Workplace and Retail and Recreation indices increasing 1.7 percentage points (pp) and 3.4 pp respectively, while Apple Driving Index declined by 0.8 pp. Power demand rose by 5.7 per cent as compared to the previous week, while the labour participation rate declined from 41.5 per cent to 40.4 per cent.
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