An index developed by the State Bank of India’s economic research wing shows that business disruption since the lockdown was imposed was as its highest on April 12. While the situation has improved in the first two weeks of June, the index was dipping again towards the third week of June.
Using the labour participation rate, mobility indices, RTO revenue collection and electricity daily maximum consumption as variables, economists at SBI have constructed a business disruption index taking March 1 as the benchmark.
“After reaching a dip on 12 April 20, indicating maximum disruption, the index started moving up. The first two weeks of June shows steep increase in index however it declined again somewhat in the third week, the SBI Ecowrap report stated.
“The ongoing efforts to control Covid-19 pandemic led to sharp declines in output and employment across the world economies for a third successive month in May but the rate of decline is easing as a number of sectors opened up, including in India,” it added.
The yearly SBI Composite Index for June declined to 35.9 (Large Decline) compared to 41.0 (Large Decline) in May. However, the monthly SBI Composite index improved to 49.2 (Low Growth) in June from 30 (Large Decline) in May.