A number of green shoots are visible in the economy five months after easing restrictions, a research note by SBI economists said. They also say that assuming that India escapes a second wave, the pandemic will subside by February 2021, the report said.

Corporate results for July-September quarter shows that the companies producing essential goods have mostly witnessed strong results while those producing non-essential goods and services have mostly shown weaker results. Moreover, rating upgrades to downgrade ratio, though much below one- implying downgrades are still higher than upgrades – has shown signs of improvement from the April-June quarter, the report said adding that the SBI Business Activity Index as well SBI Index continues to improve in October.

The report also quotes other indicators such as Apple Mobility, RTO transactions, PMI manufacturing, GST e-way bills, petrol consumption, vehicle sales, SBI index, food arrival and prices and Air quality all show improved economic activity in October. The numbers have also crossed the peak reached in last 1 year for some indicators including manufacturing index, GST e-way bills, vehicle sales (from the positive level reached 2 years ago)

The SBI economists’ estimates show that India handled Covid better significantly considering its population. Karnataka, Andhra Pradesh, Maharashtra, Kerala, Chhattisgarh, West Bengal, Delhi and Tamil Nadu have done badly in managing the pandemic, with actual cases higher than estimated cases. While Uttar Pradesh, Bihar, Gujarat and Jharkhand among others have managed the situation well with actual cases lower than estimates.

The share of rural districts in new cases have declined further to 39 per cent in October’20 compared to 43.4 per cent in September’20. New cases continue to rise in top 15 districts which are mostly urban. “The good thing is that it is not spreading to other areas and the fatality rate in top 15 districts is actually declining” the report said. ” Assuming no major second wave, our non-linear least square model on data from March 01 to Oct 06 this year shows COVID-19 is likely to subside around February.”

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