india economic monitor covid-19 september 2020 update
TRANSCRIPT
COVID-19India Economic MonitorSeptember 2020 Update
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COVID-19 Executive Summary
Source: MoHFW, POSOCO, MOSPI, Ministry of Commerce & Industry, RBI, GST Network, NPCI, NETC, Ministry of Railways, AAI, JNPT, AIOCD, mFMS, Joint Plant Committee, Ministry of Steel, Ministry of Commerce & Industry, SIAM, CMIE, IRDAI, Ministry of Finance, GST Council, Ministry of Rural Development, Analyst reports, BCG analysis
Trends across key economic indicators
• Industrial Activity: Power consumption observed to be back to last years levels in Aug'20 (YoY gap declined to 2% in Aug'20 vs. 4% in Jul'20),
however, fuel consumption YoY gap widened to 16% in Aug'20 vs. 12% in Jul'20; Index of Industrial Production improved in Jul'20 vs. previous months
• Trade: Services & merchandize exports less impacted vs. imports; Services exports recorded 11% YoY decline vs. 22% YoY decline in imports in
Jul'20; Merchandize trade still at a gap from last year levels: exports declined 13% YoY while imports declined 26% YoY in Aug'20
• Logistics: Recovery seen in domestic logistics in Aug'20 vs. Apr-Jul'20, as reflected in FASTag transactions & E-way bills (FASTag transactions
increased 12%, E-way bills generated increased 2% in Aug'20 vs. Jul'20)
• Financial Services: Deposit growth remains stable at ~11% in Aug'20 while credit growth declined from 5.9% YoY in Jul'20 to 5.5% YoY in Aug'20;
Faster recovery in volume of NPCI retail transactions vs. value; Value of UPI transactions increased to INR 3.0 Tn (93% YoY growth), an all time high
• Sector-wise Impact: Auto sales saw an improvement in Aug'20 vs. previous months (in Aug'20, Passenger vehicle sales grew 17% MoM, 2W sales
grew 24% MoM, tractor sales grew 3% MoM and 65% vs. Aug'19); Signs of recovery witnessed in steel consumption in May-Aug'20 period, however
gap still exists from pre-COVID levels; Pharma & fertilizer sales recorded a slight decline in Aug'20 vs. last year's levels after witnessing positive YoY
growth in last few months; Recovery signs in both Life and non-Life Insurance - positive YoY growth in Aug'20
• Macroeconomic Indicators: GST collections still at 12% gap from last year levels in Aug'20; MGNREGA household job demand continues to
witness YoY growth (73% in Jul'20, 66% in Aug'20, YoY)
• Sentiment: Sentiment of rural consumers improved while that of urban consumers dipped marginally, however, both are still significantly below
last year's levels; Manufacturing PMI increased from 46 in Jul'20 to 52 in Aug'20, reaching above the 50-point mark & Services PMI improved from
34 in Jul'20 to 42 in Aug'20; Slight dip in stock market transactions, along with slight increase in mutual funds AUM in Aug-20 vs. Jul-20
• GDP (Apr-Jun'20): In Apr-Jun'20, economy GDP growth contracted by 23.9% YoY; Govt. consumption expenditure YoY growth rose to 16.4% vs. 6.2%
in Apr-Jun'19, Private consumption expenditure YoY growth fell to -26.7% vs. 5.5% in Apr-Jun'19; Capital formation YoY growth contracted to -47.5%
vs. 5.3% in Apr-Jun'19
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COVID-19 cases in India still on a continuous rise
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
17-
Apr
Total cases
17-
May
17-
Jul
17-
Jun
17-
Aug
17-
Sep
9x 3.3x
3.3x
2.7x
1.9x
Deaths Recovered Active cases
Total cases 90k 354k 2.7M 5.2M
Active cases 53k 155k 672k 1M
Days Doubling Rate 13 20 28 36
Recovery Rate 38% 53% 73% 79%
Test Positivity Rate 3.9% 5.7% 8.7% 8.5%
Fatality Rate 3.2% 3.4% 1.9% 1.6%
Source: Ministry of Health & Family Welfare (MoHFW); covid19india.org; BCG analysis
Data as of 17 Sep
1M
359k
18
63%
7.7%
2.5%
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GDP Deep-Dive2
Economic Indicators1
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Summary: Trends for the last 6-7 months show signs of recovery in Aug'20 vs. Apr-Jun'20 lows; however, gap still exists with pre-COVID levels across most indicators
Indicator Unit Feb Mar Apr May Jun Jul Aug
Industrial Activity
Power Consumption MU 11% -9% -24% -15% -10% -4% -2%
Petroleum Consumption MT 4% -18% -49% -19% -8% -12% -16%
Index of Industrial Prod. Index 5% -18% -58% -35% -17% -10% NA
Trade
Services Export USD 7% 1% -9% -10% -8% -11% NA
Services Import USD 13% -2% -18% -20% -15% -22% NA
Merchandize Export USD 3% -35% -60% -36% -12% -10% -13%
Merchandize Import USD 2% -29% -60% -52% -48% -28% -26%
Logistics
E-Way Bills Generated Mn 14% -26% -84% -53% 18% -7% -4%
Railway Freight Originated MT 6% -14% -35% -21% -8% -5% NA
JNPT Container Traffic TEUs 1% -13% -37% -39% -29% -20% -19%
Air Freight kT -1% -32% -83% -68% -40% -34% NA
Financial Services
NPCI Retail Txns. (Values) INR 35% -4% -50% -29% -2% -4% 0%
NPCI Retail Txns.
(Volume)Mn 56% 24% 7% 22% 39% 37% 40%
Total Bank Credit INR 6.3% 6.1% 6.9% 6.4% 6.2% 5.9% 5.5%
Total Bank Deposits INR 9.0% 8.5% 9.7% 10.6% 11.1% 11.0% 11.0%
Indicator Unit Feb Mar Apr May Jun Jul Aug
Sector-wise Impact
Cement Production MT 8% -25% -85% -21% -7% -14% NA
Steel Consumption MT 5% -23% -87% -53% -29% -9% -8%
Passenger Vehicle Sales k -10% -56% -99% -83% -51% -14% -2%
Tractor Sales k 20% -50% -80% 1% 20% 36% 65%
Two-wheeler Sales k -15% -36% -98% -81% -38% -20% 0.2%
Fertilizer Sales MT 53% 18% 45% 98% 79% 34% -9%
Gross Premium (Life) INR 2% -32% -33% -25% -10% 7% 15%
Gross Premium (Non-Life) INR 8% -11% -9% -11% 8% 18% 10%
Pharma. Sales INR 12% 9% -11% -9% 2% 0.2% -2%
Chemical Production Index Index 3% -2% -17% -28% -34% NA NA
Macroeconomic Indicators
Total GST Collection INR 8% -8% -72% -38% -9% -15% -12%
Central Govt. Expenditure INR Tn 2.0 2.2 3.1 2.0 3.0 2.4 NA
MGNREGA Jobs Demand HHs 5% 2% -40% 45% 71% 73% 66%
MGNREGA Jobs Provided HHs 5% -1% -35% 56% 80% 83% 61%
No. of Tenders Announced k -10% -4% 7% 17% 29% 125% 80%
Sentiment
India VIX Index 23.2 64.4 34.0 30.2 29.1 24.7 22.8
PMI (Manufacturing) Index 54.5 51.8 27.4 30.8 47.2 46.0 52.0
PMI (Service) Index 57.5 49.3 5.4 12.6 33.7 34.2 41.8
Data for 2020; YoY growth represented for all indicators (except for India VIX, PMI and Central govt. expenditure – absolute values represented for Central govt. expenditure)
1
2
3
4
5
6
7
Source: POSOCO, PPAC, MoSPI, RBI, Ministry of Comm. & Industry, GST Network, Ministry of Railways, JNPT, AAI, NPCI, JPC, Ministry of Steel, SIAM, CMIE, mFMS, IRDAI, AIOCD, American Chemistry Council, GST Council, Ministry of Finance, Controller General of Accounts, Ministry of Rural Development, Projects Today, Bloomberg, NSE, BSE, IHS Markit, BCG analysis
Data as of 17 Sep
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Daily Average Power Consumption
Volume1 ('000s MUs)
IIP2 (Index of Industrial Production) &
ICI3 (Index of Core Industries)4
137 134
5490
109118
137 134 133
82
107116
120
0
50
100
150
May-
20
Ma
r-2
0
Fe
b-2
0
Jan
-20
Ap
r-2
0
Jun
-20
Jul-
20
117
2
0
4
1
3
4.0L
ock
do
wn
3.0
Pre
CO
VID
-19
3.4
3.5
Lo
ckd
ow
n 2
.0
3.7
2.8
Lo
ckd
ow
n 1
.0
3.8
2.93.2
3.9
3.6 3.5
Lo
ckd
ow
n 4
.0
Un
lock
3.0
4.0
Un
lock
1.0
3.8
3.6U
nlo
ck 2
.03.8
3.7
3.6
3.8
Un
lock
4.0
2019 2020
-19% -8%
20
0
10
5
15
Ma
r-2
0
Jan
-20
Fe
b-2
0
Ap
r-2
0
May-
20
Jun
-20
Jul-
20
Au
g-2
0
18.5 18.2
16.1
9.4
15.4 16.2 15.614.4 -22%
4% -49%-18%
Consumption of Petroleum Products
(in MMT)5
0%-10% -4%-25% -18%-24%-4% -11%
IIP ICI
-12%-2%
Power consumption back at last year's levels in Unlock 4.0; Fuel consumption YoY gap widened in Aug'20; Slight recovery in IIP & ICI
INDUSTRIAL
ACTIVITY
1
1. Pre-COVID-19 period refers to 15 Mar -24 Mar , Lockdown 1.0 = 25 Mar - 19 Apr, Lockdown 2.0 = 20 Apr - 3 May, Lockdown 3.0 = 4 May - 7 May, Lockdown 4.0 = 18 May – 29 May, Unlock 1.0 = 30 May – 30 Jun, Unlock 2.0 = 1 Jul – 31 Jul; Unlock 3.0 = 1 Aug – till date (30 Aug); Unlock 4.0=31st Aug- till date2. Index of Industrial Production (IIP) shows the growth rates in different industry groups (comprises of Mfg. (78% weightage), Mining (14%), Electricity (8%))3. Index of Core Industries (ICI) measures performance of production in 8 core industries (Coal, Crude, NG, Refinery Products, Fertilizers, Steel, Cement & Electricity)4. In view of the effect of the containment measures for COVID-19 pandemic, the indices for Apr-20 & May-20 are not comparable with preceding months5. Petroleum products include LPG, Naphtha, MS, ATF, SKO, HSD, LDO, Lubricants & Greases, FO & LSHS, Bitumen, coke as reported (provisional) by Petroleum Planning & Analysis CellSource: Power System Operation Corporation, Ministry of Statistics & Programme Implementation, Dept. for Promotion of Industry & Internal Trade, PPAC, BCG analysis
0% -16%YoY
growth
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Merchandize exports & imports continued to contract in Aug'20 vs. last year; Services trade YoY growth in Apr-Jul'20 remained negative
MERCHANDIZE &
SERVICES TRADE
2
Jul-20Jan-20 Aug-201Feb-20 Mar-20 Apr-20 Jun-20May-20
25.8
41.1
27.7 28.531.2
37.5
21.4
10.3
17.119.1
22.221.121.9
23.622.7
29.5
Merchandize Exports Merchandize Imports
1.August 2020 Merchandize Import & Export numbers are provisional as provided by the Ministry of Commerce and Industry as of 15-Sep Source: RBI, Ministry of Commerce & Industry, BCG analysis
Merchandize Trade (USD Bn) Services Trade (USD Bn)
3% -35% -60% -36% -12%Exports
YoY growth-2% -10%
2% -29% -60% -52% -48%Imports
YoY growth-1% -28%
-13%
-26%
19.0
9.9
Feb-20Jan-20 Jun-20Mar-20 Apr-20 May-20
17.0
Jul-20
12.0
17.7 16.8
11.1
18.2
11.110.0
16.5
9.3
17.0
10.1
Services Exports Services Imports
7% 7% 1% -9% -8%Exports
YoY growth-10%
9% 13% -2% -18% -15%Imports
YoY growth-20%
-11%
-22%
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9385
10
55
82 8797
0
30
60
90
120
Fe
b-2
0
May-
20
110
Jan
-20
Jun
-20
Ma
r-2
0
Ap
r-2
0
Jul-
20
Au
g-2
0
+4%
+12%60
40
0
30
20
10
50
9
Jan
-20
Fe
b-2
0
Ma
r-2
0
25
57
Ap
r-2
0
May-
20
Au
g-2
0
Jun
-20
Jul-
20
48
57
4143
49 -13%
+2%
12% -26% -84% 18%14%45% -23% -88% 437% 48%18%MoM
growth
YoY
growth-53%
111 106 103
6583
94 95
0
120
30
60
90
Ma
r-2
0
Jan
-20
Fe
b-2
0
Ap
r-2
0
May-
20
Jun
-20
Jul-
20
-14%
+2%
3% -14% -35% -21% -8%6%YoY
growth
Toll collection
suspended
from 25-Mar
to 20-Apr2
6% -7%
Rail freight improved marginally in Jul'20 vs. Apr-Jun'20; FASTag transactions & E-Way bill volumes increased in Aug'20 vs. Apr-Jul'20
LOGISTICS
3
1. E-Way bills are required to be generated at the time of transport of goods by every registered person if the value of the consignment exceeds INR 50,000; 2. As per announcement by NHAI; 3. High YoY growth due to drop in e-way bills in Jun-19; due to new provision introduced limiting generation of E-Way bills if the GST Return filing pending for last 2 monthsSource: GST Network, NHAI, NPCI, Ministry of Railways, CEIC data, BCG analysis
Railway freight traffic
originating (Mn Tons)
FASTag transaction
volume (Mn)E-way bills1 generated
(Mn)
-5% 12% -4%
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.
50
200
0
350
100
300
150
250
400
450
353
Fe
b-2
0
410426
Jan
-20
May-
20
417
Ma
r-2
0
284
Ap
r-2
0
275
344289
Jun
-20
Jul-
20
Au
g-2
0
-17%
164 162133
4076
107 123
112 106
77
5669
270
90
0
30
60
120
210
300
150
180
240
Ma
r-2
0
7
Ap
r-2
0
19
May-
20
Jan
-20
Jun
-20
Jul-
20
276
192
Fe
b-2
0
268
210
47
95
163
-30%
-37% -39% -29% -1% -32% -83% -68%-1%YoY
growthYoY
growth
Domestic International
-3% 1% -13% -20% -40% -34%
JNPT traffic improved in Aug'20 vs. Apr-Jul'20, but below Aug'19 levels; Air Freight improved in Jul'20 vs. Apr-Jun'20, but below Jul'19 levels
LOGISTICS
3
JNPT Container Traffic ('000s TEUs1) Air Freight (k Tons)
1. TEU refers to Twenty-foot equivalent unit equivalent to 20 shipping containers (20 feet long, 8 feet tall)Source: Jawaharlal Nehru Port Trust, Airport Authority of India, BCG analysis
-19%
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9.5 9.99.1 9.0 9.1 9.4
9.910.6 10.6
11.3 11.0 11.1 10.8 11.1 11.110.9
10
0
5
0
130
15
140
150
141
17-J
ul
31-J
ul
Bank deposits (INR Tn)
138
17-J
an
05
-Ju
n
YoY growth (%)
131
08-M
ay
133
31-J
an
132
14
-Fe
b
22-M
ay
24-A
pr
133
28
-Fe
b
133
139
13
-Ma
r
7.9
136
03-J
ul
27-M
ar
137
10-A
pr
137
138
140
19
-Ju
n
142
141
140
14
-Au
g
142
28
-Au
g
YoY growth Aggregate bank deposits
7.26.4 6.1 6.1 6.1
7.26.8 6.5 6.3 6.2 6.2 6.3
5.8 5.7 5.5
102
0
5
0
15
99
10
101
101
31-J
an
102
28
-Fe
b
104
27
-Ma
r
101
103
10-A
pr
103
103
24-A
pr
28-A
ug
103
08
-May
05
-Ju
n
22
-May
31-J
ul
102
13
-Ma
r
19
-Ju
n
YoY growth (%)
100
03-J
ul
7.2
102
17-J
ul
102
103
5.5
14
-Au
g
102
14
-Fe
b
100
17-J
an
103
YoY growth Aggregate bank credit
Lockdown Lockdown
Bank credit (INR Tn)
Aggregate deposits continue to remain stable while bank credit witnessed a dip in Jul-Aug'20
FINANCIAL
SERVICES
4
Total deposits value & YoY growth
aggregated for all banks
Total credit outstanding value & YoY growth
aggregated for all banks
Source: RBI DBIE, Press search, BCG analysis
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Marginal change in non-food credit split across sectors & industries(As recorded for 41 banks that account for 90% of total non-food credit outstanding)
8.5% 7.3% 6.7% 7.3% 6.8%
Industry Jan-20 Jul-20
Infrastructure 36.8% 37.4%
Metals & Metal Products 11.9% 12.0%
Textiles 6.7% 6.7%
Chemical Products 6.5% 6.2%
All Engineering 5.6% 5.0%
Food Processing 5.3% 5.6%
Construction 3.7% 3.6%
Vehicles & Equipment 2.8% 3.1%
Petroleum, Coal & Fuels 2.0% 2.0%
Cement Products 2.0% 2.1%
Gems & Jewelry 2.1% 1.9%
Rubber & Plastic 1.7% 1.7%
Mining & Quarrying 1.5% 1.5%
Paper & Paper Products 1.1% 1.1%
Beverage & Tobacco 0.5% 0.5%
Wood & Wood Products 0.4% 0.5%
Leather & Leather Products 0.4% 0.4%
Glass & Glassware 0.3% 0.3%
Other Industries 8.4% 8.1%
Total 100% 100%
Non-Food Credit1 (INR Tn)
> Jan-20 <= Jan-20
YoY
growth
Decline in YoY growth rate2
31% 32%
13%
32% 32%
27%
28%
Jan-20
90
27%
32%
28%
Feb-20
28%
13%
28%
91
28%
Mar
13%
28%
May-20
27%
32%
Apr-20
27%
13%
28%
13%
90
28%
13% 13%
89
31%
28%
Jun-20 Jul-20
8992 91
28%
6.7% 6.7%
Agriculture and allied activities
Industry
Services
Personal loans
1. Non-food credit: All loans except those to Food Corporation of India and state agencies for procurement of grains under government PDS 2.Only includes data for 41 Scheduled Commercial Banks (SCBs), accounting for 90% of total non-food credit extended by all SCBsSource: RBI
4FINANCIAL
SERVICES
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Aug'20 retail transactions (volume & value) witnessed an uptick vs. Apr-Jul'20; Stronger growth in volume as compared to value vs. last year
4
Volume of retail transactions4 (in Bn) Value of retail transactions4 (in INR Tn)
10
10%
40%
43%
10%
43%
9%
65%50%
10%
43%
49%
De
c-1
9
41%
Se
p-1
9
10%
27%
46%
10%
Oct
-19
14
47%
43%
14
Nov-
19
47%
10%
47%
43%
Jan
-20
13
24%9%
52%
34%
39%
Ma
r-2
0
Fe
b-2
0
9%
48%
10%
Ap
r-2
0
11%
62%
12
May-
20
10%
34%
Au
g-1
9
12
Jun
-20
13
57%
Jul’
20
13 14
56%7
1312
Au
g’2
0
10%
34%
57%
15
Cash1 Physical2 Digital3 (incl. UPI)
17% 16% 20% 19% 17% 19% 35% -4% -50% -29% -2%
Au
g’2
0
2.6
14%
4%
Jun
-20
15%
Oct
-19
78%
18%
2.0
Au
g-1
9
2.42.4
17%
4%
79%
Jul’
20
Se
p-1
9
82%
Ap
r-2
0
16%9%
4%
80%
15% 10%
90%
3%4%
Nov-
19
81%
2.5
3%
2.1
82%
De
c-1
9
14%
3%
Jan
-20
82%F
eb
-20
87%
13%
3%
12%
84%
1%
Ma
r-2
0
11%M
ay-
20
12%
2.1
2%
86%
2%
87%
1%
2.52.7
2.2
2.6
2.9
2%
88%
2.4
62% 54% 61% 56% 53% 59% 56% 24% 7% 22% 39%
1. Cash refers to NFS Inter Bank ATM Cash Withdrawal; 2. Physical refer to CTS Cheque Clearing (Processed Volume); 3. Digital refer to NACH- National Automated Clearing House, IMPS, RuPay Card usage at (POS), RuPay Card usage at (eCom) AEPS (Inter Bank) Txn over Micro ATM (e.g., Cash withdrawal/Cash Deposit), BBPS (Bill Payment passing through BBPCU), UPI—Unified Payments Interface, USSD 1.0, NETC 4. NPCI retail transactions does not include NEFT, RTGS through RBI, Credit and debit card transactions other than RuPay, mobile banking & internet banking transaction, cash withdrawal from bank's ATMSource: BCG Analysis, National Payment Corporation of India (NPCI)
YoY growth
37% 0%40% -4%
FINANCIAL
SERVICES
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Value of UPI transactions in Aug'20 increased by 93% vs. previous year's levels, hitting an all time high
4
Source: NPCI
0.9
3.6
1.8
0.0
2.7
2.18
1.51
2.03
Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Apr-20 May-20 Jun-20 Aug-20Jul-20Aug-19
1.91
Value of transactions in INR Tn
Jul-19 Mar-20
1.46 1.55
1.89
2.16
1.61
2.232.06
2.62
2.91 2.98
+93%
+3%
1.251.331.311.311.221.150.960.920.82 1.00 1.501.23 1.34
YoY%
Volume of
Txn in Bn.1.61
FINANCIAL
SERVICES
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Signs of recovery witnessed in steel in Aug'20 vs. previous months; Cement production slightly dipped in Jul'20 vs. previous months
5SECTOR-WISE
IMPACT
5% -21%YoY
growth8% -25% -85% -90% -15%
4.4 4.4 4.1
2.0
3.54.0
4.5
0
2
4
6
Jul-
20
Jun
-20
Jan
-20
Fe
b-2
0
Ma
r-2
0
May-
20
0.4
Ap
r-2
0
Au
g-2
0
+2%
2% 7% -5%
Long Steel Consumption
Cement Production
(in MT)
Consumption of Long Steel
(in MMT)
-83% -43%
4.5 4.4
3.2
0.6
2.1 2.5
3.8 4.0
0
2
4
6
Jan
-20
Jun
-20
Ma
r-2
0
Fe
b-2
0
Jul-
20
Ap
r-2
0
May-
20
Au
g-2
0
-11%
7% 2% -38%
Flat Steel Consumption
Consumption of Flat Steel
(in MMT)
-56% -51%-7% -12% -6%
Source: Joint Plant Committee, Ministry of Commerce and Industry, Livemint, CMIE, BCG Analysis
4.30
10
20
30
40
Ma
r-2
0
24.8
Fe
b-2
0
26.330.731.4
Jan
-20
Ap
r-20
22.4
May-
20
Jun
-20
24.2
Jul-
20
-23%
Cement Production
-13.5% -5%-10%
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Auto sales saw an improvement in Aug'20 vs. previous months, though still below last year's levels; 2-W & tractor sales grew vs. Aug'19 levels
5SECTOR-WISE
IMPACT
Note: Apr-20 figures for all categories based on CMIE; Accurate split between domestic sales & exports for Apr-20 not available; all sales considered under exports based on press search1. Tata Motors data is available for Apr-June only, BMW, Mercedes and Volvo Auto data is not available Source: SIAM, CMIE, Press search, BCG analysis
Passenger vehicles sales ('000 units) Two wheeler sales ('000 units)
Tractor Sales ('000 units) Three wheeler sales ('000 units)
57 59 57 61 70
248 227 210 190 189
106183 216
218
Aug-19
259
Apr-19
130
May-19 Apr-20Jun-19 Jul-19
0434 2515
May-20 Jun-20
254
35
Jul-20
384
Aug-201
305 286 266 251
49
2,0011,725 1,649 1,512 1,514
1,013 1,2811,560
1,209
0
Jun-19 Jun-20
297293
1,947
401
May-20Apr-19 May-19
307
Jul-19
298
Aug-19 Aug-20
46
Apr-20
28097 196
1,818
181
Jul-20
256
2,4022,018 1,812
46 377
1,4621,816
75
71
57
6
76
Jul-19Apr-19 May-19
58
6
Jun-19
46
6
37
62
Aug-19 May-20
12
Jun-20
93
1 6
Apr-20
4
60 6563
8
Jul-20
8
Aug-20
6582
5244
12
65
99
73
46 40 40 40 4618 26 20
40
46 52 52 5659
Jul-20
7
15
Apr-20Apr-19
96
Jul-19
54
May-19
92
0
Jun-19 Aug-19
2
May-20
10
Jun-20
7 13
Aug-20
92 91105
2036 33
Domestic sales 2019 Exports 2019 Domestic sales 2020 Exports 2020
-99% -51%-83%YoY growth -98% -38%-81%YoY growth
-92% -66%-78%YoY growth20%YoY growth -80% 1%
-14% -20%
-61%36%
-2%
-48%
0.2%
65%
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Pharma and fertilizer sales recorded a decline in Aug'20 vs. last year's levels after witnessing positive YoY growth in Jun-Jul'20
5SECTOR-WISE
IMPACT
1. Indian Chemical Production Index refers to a 3-month moving average figure for chemicals production with figure for 2012 as base figure (100)Source: AIOCD, American Chemistry Council, Mobile Based Fertilizer Management System (mFMS), Ministry of Finance, PIB, The Economic Times, Press search, BCG analysis
Pharmaceutical Sales
(INR k Cr)
YoY
growth
Jan
-20
Ap
r-2
0
Fe
b-2
0
Ma
r-2
0
May-
20
Jul-
20
Jun
-20
Au
g-2
0
12.1 12.1 11.8
10.2 10.311.2
12.1 12.2
Fertilizer Sales
(in LMT)
-17% -28%
120 121115
98
8478
May-
20
Ma
r-2
0
Ap
r-2
0
Jan
-20
Fe
b-2
0
Jun
-20
3% 3% -2%
Indian Chemical Production
Index1 (3mo. moving avg.)
-34%45% 98%11% 53% 18% 79% 34%
Au
g-2
0
69
Jan
-20
Fe
b-2
0
Ma
r-2
0
29
Jun
-20
Ap
r-2
0
May-
20
Jul-
20
64
47
21
40
69
92
8% -9% 2%12% 9% -11% 0.2% -2% -9%
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19%
Life Insurance & Non-Life Insurance segment showed noticeablegrowth in premium in Aug'20 vs. previous months & last year's levels
5
Life Insurance premium observed noticeable recovery in
Jul-Aug'20Non-Life1 Insurance premium grew ~10% YoY in Aug'20
15,892
12,23112,948
14,370
15,965
14,477
10,891
13,961
17,01117,623
Jul-19May-19Apr-19 Jun-19 Aug-19 Apr-20 May-20 Jun-20 Jul-20 Aug-20
+10%
1. Non-Life Insurance includes Fire, Marine, Motor, Engineering, Health, Cop Insurance, Credit Guarantee, Aviation, Personnel accident and Miscellaneous Source: IRDAI, BCG Analysis
9,982
18,414
32,241
21,50923,555
6,728
13,739
28,869
22,986
27,040
Aug-19Apr-19 Jun-20May-19 Jun-19 Jul-19 May-20Apr-20 Jul-20 Aug-20
+15%
Number of
policies
(‘000)1283 1625 1900 416 1008 1681
YoY growth
rate for no.
of policies
-68% -38% -11%
Premium (INR Cr.)
2193 1808
-18%
SECTOR-WISE
IMPACT
Premium (INR Cr.)
2330 1881
-19%
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India’s fiscal deficit reached INR 8.21 Tn (103% of budget estimate)1 in Apr-Jul'20; GST collections dipped 12% in Aug'20 vs. last year
Central Govt. Revenue & Expenditure (INR Tn)(based on data from Controller General of Accounts, Ministry of Finance)
Total GST Collections3 (INR Tn)(based on data from GST Council)
8% 8% -72% -38% -9%-8%
Expenditure
YoY growth
1. Business Standard 2. Gross Fiscal Deficit is the difference between the total Non-Debt Receipts of the government (revenue receipts and non-debt capital receipts) and Total expenditure 3. GST Collections include all components: CGST, SGST, IGST, CessSource: Ministry of Finance, GST Council, BCG analysis
4
2
3
0
1
5
2
6
7
-1
0
9
8
-2
10 3
1
0.2
Exp
en
dit
ure
& R
ece
ipts
(IN
R T
n)
2.8
1.9
Gro
ss Fisca
l De
ficit (INR
Tn
)
0.5
Jan-20 Feb-20
-1.0
2.0
Mar-20 Apr-20 May-20
2.0
2.2
0.5
Jun-20 Jul-20
1.6
1.61.0
2.01.5
3.2
0.80.3
3.1 3.0
1.1
2.4
Total Expenditure Non-Debt Receipts Gross Fiscal Deficit2
0.3
0.9
0.0
0.2
0.5
0.1
0.7
1.1
0.4
0.6
0.8
1.2
1.0
Jul-20
0.62
Jan-20
To
tal
GS
T C
oll
ect
ion
s (I
NR
Tn
)
Feb-20 Mar-20 Jun-20Apr-20 May-20 Aug-20
1.11
0.98
0.32
0.910.87 0.86
1.05
-71%
-22%
Revenue
YoY growth
-15%
-6% 80% 21% -21%5%
5% -2% -72% -64%37%
46%
-24%
6%
-28%
6MACROECONOMIC
INDICATORS
-12%YoY
growth
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Recovery in tender count in Aug'20 vs. Apr-Jun'20; however 19% MoM decline in count of tenders announced by state & central govts in Aug'20
Jul-
19
Au
g-1
9
Sep
-19
1.7
De
c-1
9
No
v-1
9
0.8
Fe
b-2
0
Jan
-20
Ma
r-2
0
Ap
r-2
0
May-
20
2.1
Jun
-20
Jul-
20
Au
g-2
0
1.5
Oct
-19
1.8 1.8 1.72.0 1.8
2.7 2.82.5
3.3
2.7
-19%
Source: Project Today database, BCG analysis
Count of tenders announced by central &
state govts (k)
Value of tenders announced by central & state
govts (INR Tn)
Au
g-1
9
Fe
b-2
0
Sep
-19
Jan
-20
No
v-1
9
0.55
Dec-
19
0.74
Ma
r-2
0
Ap
r-2
0
May-
20
Jul-
20
Au
g-2
0
Jun
-20
0.46
Oct
-19
Jul-
19
0.31
0.57 0.60
0.36
0.580.65
0.600.50 0.48
0.57
0.44
-24%
6
YoY
growth17%-10% 7%-4%-5% 29%
YoY
growth54%-53% 244%-42% 123%125% 55%-49% -20%80%
MACROECONOMIC
INDICATORS
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MGNREGA1 work demand & employment still at 60%+ higher than last years levels; however dip observed in Aug'20 vs. Jun-Jul'20
6
Job demand under the scheme has jumped sharply after lakhs of workers returned to their villages due to the crisis
30
0
40
10
20
19
Jan-20
28
Apr-20
16
Feb-20 Aug-20
16
Mar-20
11
33
May-20
39
Jun-20 Jul-20
20
80%YoY
Growth-13% 56%-35%-1%5%
Work Demand
(households, in Mn)
Employment Provided
(households, in Mn)
40
0
10
20
30
50
Jun-20
19
Apr-20Jan-20
22
Feb-20
21
Mar-20
13
36
May-20
4432
Jul-20 Aug-20
24
71%YoY
Growth -11% 45%-40%2%5% 73%
83%
1. Mahatma Gandhi National Rural Employment Guarantee Act; 2. Based on press searchSource: Ministry of Labor & Employment, Ministry of Rural Development, The Indian Express, Outlook India, LiveMint, BCG analysis
61%
66%
MACROECONOMIC
INDICATORS
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Organized sector hiring and joining activity improved in Jul-Aug'20 (based on select indicators)
6
1. Jan-20 level considered as pre-COVID-19 level 2. Active members refers to total contributing members during last one year as published on EPFO dashboard as on 21-Sep-20; 3. Covers every establishment in which 20+ people are employed and certain organizations are covered, subject to certain conditions and exemptions even if they employ less than 20 persons each 4. Net EPFadditions are revised monthly as per the EPFO dataSource: Ministry of Labor and Employment, InfoEdge, Naukri.com, BCG analysis
Naukri Jobspeak Index observed gradual uptick in
Aug'20
Net New EPF Subscriber Trend
Net new EPF subscribers are net of the members newly enrolled, exited and rejoined
during the month as per records of the EPFO
Employees in an establishment3 drawing less than INR 15,000 per month have to
mandatorily become members of the EPF upon joining
Net new EPF subscribers improved to ~0.85 Mn in Aug'20 –
higher than last few months, as well as last year
Naukri Jobspeak Index
Monthly index which calculates and records hiring activity based on newly added job
listings on Naukri.com every month
Jobs analyzed for the monthly index are qualified on the basis of white-collar jobs
belonging to the organized corporate sector
100 101
82
38
51 5359
0
25
50
75
100
125
Jul-20Jul-19 Jan-20 Mar-20Sep-19 Nov-19 May-20 Sep-20
40
Naukri Jobspeak Index
10
0
Jan-201 number
taken as base
for index (100)
Net new EPF Subscriber (in Mn)
0.83 0.79 0.81
0.500.31
0.62 0.69
1.00 1.02
0.57
-0.06
0.040.48
0.85
-0.5
0.0
0.5
1.0
1.5
Apr’20Jan’20 Feb’20 May’20Mar’20 Jun’20 Jul’20
2019
2020
~59 Mn active members on EPFO
in last 12 months2
Avg. monthly net additions for CY
2019 at ~0.64 Mn
MACROECONOMIC
INDICATORS
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WPI turned positive in Aug'20 after witnessing a negative trends for the last 4 months; CPI remains stable in Aug'20 vs. Jul'20
6
1. The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated as year on year increase in prices of the commodities 2. The wholesale price index (WPI) measures and tracks the changes in the price of goods in the stages before the retail level –that is, goods that are sold in bulk and traded between entities or businesses instead of consumers. It is calculated as year on year increase in prices of the commoditiesNote: In May 2016, the Reserve Bank of India (RBI) Act, 1934 was amended to provide a statutory basis for the implementation of the flexible inflation targeting framework. Source: BCG Analysis. DPIIT, MOSPI, Office of the Economic Advisor - Department for Promotion of Industry and Internal Trade,CMIE
Monthly inflation rate (in %)
4.8
5.75.3
4.65.2
5.5
4.5
3.52.8
2.9
3.1
3.2
2.8
2.0
1.21.2
0.30.0
2.8
3.5
0.2
10
-5
0
5
Feb
-20
Jun
-18
3.6
Ap
r-18
2.3
Ma
y-18
Au
g-1
8
Jul-
18
Sep
-18
No
v-19
Oct
-18
No
v-18
Ma
y-19
Dec-
18
-3.4
Jan
-19
Jun
-19
Feb
-19
Ma
r-19
Ap
r-19
Jul-
19
Au
g-1
9
Sep
-19
Oct
-19
0.6
Dec-
19
Jan
-20
0.4
Ma
r-20
-1.6
Ap
r-20
Ma
y-20
-1.8
Jun
-20
-0.6
Jul-
20
Au
g-2
0
Wholesale Price Index (WPI)2 Consumer Price Index (CPI)1
4.94.9
3.73.73.4
2.62.9
3.0
3.0
3.2
3.1
7.47.6
7.2
6.3
6.2
6.76.7
0
4
2
8
6
4.6
Ma
y-18
Jun
-18
Ap
r-18
4.2
Jul-
18
Au
g-1
8
5.5
4.6
Oct
-18
2.3
No
v-18
Jul-
20
2.1
Jan
-20
Dec-
18
Jan
-19
Feb
-19
Ma
r-19
Ap
r-19
Jun
-20
Ma
y-19
Jun
-19
Jul-
19
3.3
Au
g-1
9
4.0
Ma
r-20
Sep
-19
Sep
-18
No
v-19
Dec-
19
2.0
6.6
Oct
-19
5.8
Ap
r-20
Ma
y-20
Au
g-2
0
Feb
-20
MACROECONOMIC
INDICATORS
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RBI retained policy rates in Aug'20 at the same level, while MCLR on bank borrowings recorded slight decline
1. MCLR: Minimum interest rate at which scheduled commercial banks can lend to customers (based on incremental cost of funds). Marginal Cost of Funds based Lending Rate was introduced from April 2016 for fixing interest rates, and replaced the former Base rate methodology (based on average cost of funds). 2. Base Rate: Minimum rate set by the Reserve Bank of India below which banks are not allowed to lend to its customers 3. Repo Rate: Interest rate at which the RBI lends short term funds to licensed commercial banks 4. Reverse Repo Rate: Interest rate which the RBI borrows money from commercial banksSource: CMIE, RBI DBIE
Reserve bank’s policy rates (%) MCLR1 of scheduled commercial banks (Median rate on one year borrowings, in %)
8.51
4.00
3.353
6
9
12
Sep
-19
Jul-
19
Au
g-1
9
No
v-1
9
Oct
-19
De
c-1
9
Jan
-20
Fe
b-2
0
Ma
r-2
0
Ap
r-2
0
May-
20
Jun
-20
Jul-
20
Au
g-2
0
Policy rate %
Repo rate3Base rate 2 Reverse Repo rate4
7.45
7.40
8.73
6.42
3
6
9
12
Jul-
19
Au
g-1
9
Oct
-19
Sep
-19
No
v-1
9
De
c-1
9
Jan
-20
Fe
b-2
0
Ma
r-2
0
May-
20
Ap
r-2
0
Jun
-20
Jul-
20
Au
g-2
0
MCLR (%)
Private Sector BanksTotal
Foreign BanksPublic Sector Banks
6
Data as of 17 Sep
MACROECONOMIC
INDICATORS
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INR improved to ~73/dollar after remaining rangebound at ~75; Forex reserves continue to hit record high levels, in the last week of Aug'20
Source: CMIE, RBI
475 476 480 479 481 485 487 490 493 502 508 506 507538 535 538 541 542
0
100
200
300
400
500
600
1-M
ay-
20
Forex reserves (US$ Billion)
3-A
pr-
20
10-A
pr-
20
24-A
pr-
20
12-J
un
-20
17-A
pr-
20
15-M
ay-
20
8-M
ay-
20
22-M
ay-
20
5-J
un
-20
29-M
ay-
20
21-A
ug-2
0
19-J
un
-20
26-J
un
-20
7-A
ug-2
0
14-A
ug-2
0
28-A
ug-2
0
4-S
ep
-20
74.33
73.35
73.60
72.82
70
75
80
19-J
ul-
20
31-M
ay-
20
21-J
un
-20
7-J
un
-20
14-J
un
-20
12-J
ul-
20
28-J
un
-20
5-J
ul-
20
26-J
ul-
20
2-A
ug-2
0
9-A
ug-2
0
16-A
ug-2
0
23-A
ug-2
0
30-A
ug-2
0
Exchange Rate (INR/USD)
Exchange rate as on 17th Sep'20
Exchange Rate (INR/USD) Forex reserves (US$ Billion)
6MACROECONOMIC
INDICATORS
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Manufacturing PMI reached above the 50-point mark in Aug'20; Services PMI witnessed a noticeable uptick, however still below the 50-point mark
SENTIMENT –
MFG. & SERVICES
PMI
7
Note: The Purchasing Managers Index (PMI) is a measure of the prevailing direction of economic trends in manufacturing and services sectors. The PMI is based on a monthly survey of supply chain managers across 19 industries, covering both upstream and downstream activity. Value >50 indicates possible expansion in the sector, and value <50 indicates recession.Source: IHS Markit, CMIE, Analyst Reports, BCG analysis
Manufacturing PMI improved to 52 in Aug'20 from 46
in Jul'20
Services PMI witnessed a marginal uptick from 34.2 in
Jul'20 to 41.8 in Aug'20
Manufacturing PMI Services PMI
Possible expansion
in the sector
Possible contraction in the sector
53.857.5
33.7
41.8
0
5
10
15
20
25
30
35
40
45
50
55
60
Oct
-19
No
v-19
Ma
y-20
Dec-
19
Feb
-20
Ap
r-20
Ma
r-20
Jun
-19
Sep
-19
Jul-
19
Jun
-20
Jan
-20
Jul-
20
Au
g-2
0
Au
g-1
9
34.2
12.6
49.350
5.4
-27%
Decline in Services PMI
from the 7-year peak in
Feb-20 owing to impact on
global demand; dropped
below 50-mark
Sharp recovery in Jun-20
52.555.3
47.2
46.0
52.0
0
5
10
15
20
25
30
35
40
45
50
55
60
Au
g-1
9
Oct
-19
No
v-19
Jan
-20
Feb
-20
Dec-
19
Ma
r-20
Ap
r-20
Jul-
19
Ma
y-20
Sep
-19
Jul-
20
Jun
-19
Jun
-20
Au
g-2
0
27.430.8
50-6%
Possible expansion
in the sector
Possible contraction in the sector
Decline in Mfg. PMI from
the peak in Jan-20 owing to
drop in exports, supply
chain disruptions due to
COVID-19; Has shown
sharp recovery since
easing of restrictions
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Sentiment of rural consumers improved marginally while urban consumer sentiment witnessed a slight dip in Aug'20 vs. Jul'20
SENTIMENT-
CONSUMER
SENTIMENT
7
Source: CMIE Consumer Pyramids Survey, BCG analysis
CMIE Consumer Sentiment Survey Rural Consumer Sentiment Index
103 103 102 100
54 52 50 43 44 47 43 44 45 41 45 43 45 43 4149 48 43 46 47 48 47 51
150
50
0
100
08-M
ar
22-M
ar
01-M
ar
15-M
ar
10-M
ay
29-M
ar
05-A
pr
31-M
ay
12-A
pr
24-M
ay
19-A
pr
26-A
pr
03-M
ay
28-J
un
17-M
ay
07-J
un
09-A
ug
14-J
un
12-J
ul
21-J
un
05-J
ul
19-J
ul
26-J
ul
02-A
ug
16-A
ug
23-A
ug
30-A
ug
103 101 101 95
4839 41 42 40 35 35 35 35 35 38 38 37 41 43 44 41 40 39 44 40 37 36
150
0
100
50
24-M
ay
22-M
ar
01-M
ar
19-J
ul
08-M
ar
15-M
ar
29-M
ar
05-A
pr
10-M
ay
12-A
pr
23-A
ug
19-A
pr
26-A
pr
03-M
ay
17-M
ay
31-M
ay
26-J
ul
07-J
un
21-J
un
14-J
un
28-J
un
05-J
ul
12-J
ul
02-A
ug
09-A
ug
16-A
ug
30-A
ug
Sample Size• 1.74L households in 90 cities and 969
villages surveyed over 4 months
Methodology• Longitudinal survey: Same set of
households surveyed in batches over
time
• Scoring based on 5 questions:– Perception of current well-being
– Expectations of future well-being
– Perceptions of current economic
conditions of the country
– Perceptions of prospective
economic conditions of the
country
– Household's propensity to spend
on consumer durables
Urban Consumer Sentiment Index
Data as of 17 Sep
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Pharma continues its positive trajectory in the Indian stock market; Realty, Bank Nifty & Financial Services see maximum decline
SENTIMENT –
NIFTY SECTORAL
INDICES
7
Sectoral Index Change (%)
Pharma 38.26%
IT 10.11%
Energy 8.17%
FMCG 1.32%
Infra 0.26%
Auto -0.51%
Commodities -0.95%
NIFTY -2.35%
Metal -2.42%
Media -10.44%
Services -10.57%
Financial Services -17.22%
Bank Nifty -20.34%
Realty -26.97%
1. Growth rate vs. 01-Feb-20Source : NSE, Bloomberg, BCG analysis
Nifty Sectoral Indices
Descending order of performance1
10
0
-50
20
40
-40
-20
-30
-10
30
50
Change (%)
01-F
eb
18-J
un
19-F
eb
11-M
ar
30-M
ar
22
-Ap
r
12-M
ay
01-J
un
10-J
ul
27-J
ul
11-A
ug
26-A
ug
Data as of 17 Sep
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Stock market transactions declined slightly vs. Jun-Jul'20, however still at 80%+ higher than last year; Mutual fund AUM grew by 8% YoY in Aug'20
SENTIMENT –
STOCK MKT.
TRANSACTIONS
7
1. Volatility Index is a measure of market’s expectation of volatility over the near term; India VIX is a volatility index based on the NIFTY50 Index Option prices providing the expected market volatility over the next 30 calendar days – figures represented are as of end of every month shown2. Mutual funds Assets Under Management (AUM) represented as recorded at end of every month shownSource: BSE, NSE, AMFI, BCG analysis
Stock Market Transactions (INR k Cr)
19% 18% -3% -5% 5%-6%
20
5
0
30
10
15
25
27.2
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
27.9
Jul-20 Aug-20
22.323.9 24.5
25.527.1 27.5
Mutual Funds AUM include investments from individuals (50.5%) & institutions
(49.5%); institutions include domestic & foreign institutions and banks
11%
Mutual Funds AUM2 (INR L Cr)
17
64
30
2925 23
0
20
40
60
80
0
500
1,500
1,000
Feb-20
56
1,006
Tra
nsa
ctio
n V
alu
e (
IN
R)
k C
r Ind
ia V
ola
tility Ind
ex (V
IX)1
80
805
82
Jan-20
56
7971,000
Mar-20
44
906
34
1,283
Apr-20
65
May-20
110
1,351
Jun-20
1,349
Jul-20
93
Aug-20
23
India VIX
BSE
NSE
10% -20% 21% 12% 135%1%BSE YoY
21% 44% 42% 27% 127%25%NSE YoY
66%
89%
8%83%
90%
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GDP Deep-Dive2
Economic Indicators1
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COVID-19
$2.2trillion
$2.4trillion
$2.6trillion
$2.8trillion
Note: Real GDP at 2011-12 base prices, converted from INR using 2011-12 exchange rates (Rs. 47.95); The numbers would differ from estimates from World Bank, IMF, etc. due to difference in the base year (we use 2011-12)Source: CMIE, BCG Analysis
Indian economy contracted by 23.9% YoY in the Apr-Jun'20 quarter;Real GDP in the quarter reached almost to Apr-Jun'15 levels
xx Overall size of economy at the end of FY
GDPDEEP-DIVE
$2.9trillion
569
618
654
701
737
561
800
700
500
600
Apr-
Jun’15
Apr-
Jun’16
Real GDP ($ Bn)
Apr-
Jun’17
Apr-
Jun’18
Apr-
Jun’19
Apr-
Jun’20
+7.1%
+5.2% -23.9%
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COVID-19 The break-up of GDP across components shows uptick in Government spending, vs. decline in other GDP components
Source: CMIE, BCG AnalysisNote: Highlighted circles represents growth (green) or decline (yellow) compared to the previous year quarter (Apr-Jun'20 vs Apr-Jun'19)
I XC G MY
5.3% 3.2%5.5% 6.2% 2.1%5.2%Apr-Jun
2019
-5.8% -8.5%2.7% 13.6% -7.0%3.1%Jan-Mar
2020
-47.5% -19.8%-26.7% 16.4% -40.4%-23.9%Apr-Jun
2020
-4.3% -6.1%6.6% 13.4% -12.4%4.1%Oct-Dec
2019
Quarterly
growth %
change YoY GDPPvt.
Consumption
Govt.
Consumption
Gross
InvestmentExports Imports
GDPDEEP-DIVE
-2.9% -2.2%6.4% 14.2% -9.4%4.4%Jul-Sep
2019
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COVID-19 Composition of private consumption & investments reduced in theApr-Jun'20 quarter while that of govt. consumption witnessed an increase
55.8% 56.2% 55.5% 58.5% 56.1% 56.4% 56.5% 59.9% 55.9% 54.3%
35.1% 35.4% 34.6%35.2% 34.8% 35.4% 32.2%
32.4%31.8%
24.4%
8.4% 11.7% 11.9% 9.8%9.1% 11.8% 13.0% 10.6%
10.0%18.1%
4.3% 0.3% 2.1% 1.4% 0.4%
-1.7%
3.9% 0.3%
-4.1%-3.6%
Jan-Mar’18 Jan-Mar’19Apr-Jun’18
-3.6%
Jul-Sep’18
-3.0%-0.5%
Oct-Dec’18
-1.4% -1.6%-3.3%-0.3%
Apr-Jun’19
-2.1%
Jul-Sep’19
-1.2%
Jan-Mar’20Oct-Dec’19
2.8%
Apr-Jun’20
1. Statistical Discrepancy: taking the GDP from the production approach as the control total, gives the measure of the overall difference between the production approach and the expenditure approach followed for estimation.Note: This composition is basis Real GDPSource: CMIE, BCG Analysis, MOSPI
Private final consumption expenditure Government final consumption expenditure Net exportsInvestments Discrepencies 1
Composition of net
exports moved to
the positive
territory in the
quarter
GDPDEEP-DIVE
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COVID-19 Government Final Consumption Expenditure continued to rise; Private Consumption Expenditure charted to the negative territory in Apr-Jun'20
Source: CMIE, BCG Analysis, RBI, Press articles
5.5
-26.7
6.2
16.4
-50
-25
0
25
Oct-Dec’18 Oct-Dec’19
Final Consumption Expenditure, % change YoY
Jul-Sep’18 Jan-Mar’19 Apr-Jun’19 Jul-Sep’19 Jan-Mar’20 Apr-Jun’20
Private Government
GDPDEEP-DIVE
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COVID-19 Gross capital formation contracted due to minimal economic activity inthe Apr-Jun'20 quarter
Source: CMIE
5.3
-47.5
-50
0
-25
25
Jan-Mar’19
Gross Capital Formation, % change YoY
Jul-Sep’18 Oct-Dec’18 Apr-Jun’19 Jul-Sep’19 Oct-Dec’19 Jan-Mar’20 Apr-Jun’20
Capital formation
constrained due to
lockdown of activity
GDPDEEP-DIVE
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COVID-19 Somber investment climate impacted the FDI inflows in India in Apr-Jun’20
1. Denotes inward total FDI to India; 2. June'20 figures are provisionalSource: CMIENote: Past period data may vary from the previous versions of the Economic Monitor owing to restating of previous years’ data by the CMIE/reporting agencies
2.33.1 3.2
5.54.6
3.0 2.8 2.5
4.7 4.5
1.6
4.2 4.0
2.53.2
5.5
4.1
7.6
4.7
2.8 3.04.1 3.7
5.56.2
4.04.9
3.42.5
-0.1
Jan
-18
May-
18
Ma
r-1
8
Jul-
18
Feb
-18
Ap
r-1
8
Jan
-20
Jun
-18
Au
g-1
8
Se
p-1
8
Oct
-18
Ma
r-2
0
Nov-
18
De
c-1
8
Jan
-19
Ma
r-1
9
Feb
-19
Ap
r-1
9
Se
p-1
9
May-
19
Jun
-19
Oct
-19
Jul-
19
Jun
-20
2
Au
g-1
9
Nov-
19
De
c-1
9
Feb
-20
Ap
r-2
0
May-
20
In June 2020, Moody’s
downgraded India’s
sovereign rating
to Baa3
Foreign Direct Investments1 ($B)
$42 Bn2018
$50 Bn2019
$21 Bn2020 YTD
xx Annual (Calendar Year) FDI Inflows
GDPDEEP-DIVE
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COVID-19 Except agriculture and allied activities, all major sectors witnessed contraction due to the lockdown in the quarter
57.6%
24.6%
17.8%
Apr-Jun’20
100%
Share in
Industry GVA
3.94%Agriculture
-8.62%Industry
-0.62%Services
Apr-Jun Qtr. CAGR1
over 2016-20
GDPDEEP-DIVE
3.4
-38.1
-20.6
-40
-60
-20
0
20
GVA Quarterly growth, % change YoY
Apr-
Jun’16
Apr-
Jun’17
Apr-
Jun’18
Apr-
Jun’19
Apr-
Jun’20
Agriculture, forestry & fishing Industry Services
1. CAGR= [(Value of GVA in INR Mn in Apr-Jun'20/Value of GVA in INR Mn in Apr-Jun'16)^(1/4)]-1 Source: CMIE, BCG Analysis
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COVID-19 Major components of the services sector witnessed a slip during Apr-Jun'20, especially trade, hotels, transport, storage & communication
-47.0
-5.3-10.3
-60
-40
-20
0
20
Services GVA Quarterly growth, % change YoY
Apr-
Jun’17
Apr-
Jun’16
Apr-
Jun’18
Apr-
Jun’19
Apr-
Jun’20
Trade, hotels, transport, storage and communication
Financial services, real estate and business services
Community, social and personal services
51.8%
25.5%
22.7%
Apr-Jun’20
100%
Share in
Industry GVA
-10.46%Trade, hotels,
transport, storage and communication
4.73%Community, social
and personal services
3.02%Financial services,
real estate andbusiness services
Apr-Jun Qtr. CAGR1
over 2016-20
GDPDEEP-DIVE
1. CAGR= [(Value of GVA in INR Mn in Apr-Jun'20/Value of GVA in INR Mn in Apr-Jun'16)^(1/4)]-1 Source: CMIE, BCG Analysis
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COVID-19 Construction remained the most affected sub-sector, contracting by 50% during the Apr-Jun'20 quarter
-23.3
-39.3
-7.1
-60
0
-20
-40
20
Apr-
Jun’17
Apr-
Jun’16
Apr-
Jun’20
Industry GVA Quarterly growth, % change YoY
Apr-
Jun’18
Apr-
Jun’19
Mining and quarrying
Manufacturing
Electricity, gas, water supply and other
utility services
Construction
55.8%
20.8%
12.1%
11.3%
100%
Apr-Jun’20
Share in
Industry GVA
-6.55%Mining and quarrying
4.96%Electricity, gas,
water supply and other utility services
-8.98%Manufacturing
Apr-Jun Qtr. CAGR1
over 2016-20
GDPDEEP-DIVE
-13.59%Construction
1. CAGR= [(Value of GVA in INR Mn in Apr-Jun'20/Value of GVA in INR Mn in Apr-Jun'16)^(1/4)]-1 Source: CMIE, BCG Analysis
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Indian GDP growth forecasts continuously being revised downwards over the last few months
5.2 5.1 5.2 5.83.5
0.83.5
1.5
DBSBarclays Fitch
Ratings
Crisil
-1.7 -4.3 -1.7 -4.3
6.0 5.5 5.83.32.1 3.6 1.9 1.6
Goldman
Sachs
Economic
Intelligence
unit
India
Ratings
IMF
-3.9 -1.9 -3.9 -1.7
May Jun
1. Pre-lockdown forecasts were made during Feb-2020/early Mar-2020; 2. Post-lockdown forecasts refer to forecasts made between 25-Mar to 20-Sep-20203. Pre-lockdown forecast for SBI is as of 16-Apr-2020Source: Analysts reports, BCG analysis
India GDP growth forecast for FY21 (YoY, %)Mar-Apr
4.7 3.35.8 5.5
-5.0 -5.0
1.0
Moody’s
Investor
Service
ICRA Goldman
Sachs
DBS
0.0
-9.7 -8.3 -4.8-5.5
1.15.1 5.2 4.5
-6.8 -5.0 -5.0 -6.0
SBI3 Deutsche
Bank
S&PFitch
Ratings
-7.9 -10.1 -10.2 -10.5
5.5 5.2 5.8
-4.0 -3.2 -4.5
Moody’s Barclays IMF
-9.5 -8.4 -10.3
4.1 5.5
-2.0-5.3
Bank of
America
India
Ratings
-6.1 -10.8
Pre-lockdown forecasts1
Post-lockdown forecasts2
3.6% to 0.8% 1.0% to -6.8% -2.0% to -5.3%
Jul
-4.5% to -9.5%
Data as of 20 Sep; Estimates likely to be revised further
4.1 4.7 5.5
-6.0-9.5
-4.5
ICRABank of
America
FICCI
-10.1 -14.2 -10.0
5.8 5.7
-6.0 -6.1
DBS Nomura
-11.8 -11.8
NON - EXHAUSTIVE
Aug-Sep
5.21.1
5.7
-6.0
-10.9 -10.8
Barclays SBI3 Nomura
-11.2 -12.0-16.5
-6.0% to -14.8%
GDP FORECASTS
5.5 5.1 3.3
-11.8 -10.5-14.8
India
Ratings
Fitch
Ratings
Goldman
Sachs
-17.3 -15.6 -18.1
GDP Growth
Forecast %
Range
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