On Tuesday the brokerage firm Nomura India Business Resumption Index (NIBRI) revealed a marginal decline to 85.3 for the week ended November 15, from a post-lockdown high of 85.8 a week earlier, and was trending at 15 percentage points below pre-COVID-19 pandemic levels, the brokerage firm said in a note on Tuesday. Due to weakness in the labour market, India’s recovery rate became stagnant in mid-November.
The NIBRI is a weekly tracker of high-frequency indicators from mobility to labour participation that signal the levels of activity in the economy.
Mobility indicators continued to rise because of the festive season with both Google workplace and retail and recreation mobility inching up mobility indicators continued to rise.
“However, we see continued sluggishness in labour markets, with the labour participation rate persisting below pre-pandemic levels, declining to 39.5% from 40.2% the previous week,” the report said. The fall came on the back of a decline from 41.2% in the earlier week.
The power demand recorded a sharp 5.6% decrease during the week compared to a strong 8.7% rise seen in the week before, it said.
In a previous note, the NIBRI had also said that November’s performance was expected to surpass October’s if the improvements in indicators during the first week of this month held out.
Nomura noted that India’s pandemic remained under control despite the festive season, but added that daily testing numbers had come down over the past few days.
The note counted the fading of momentum post the festive and pent-up demand phase and the likely fiscal drag on growth from government expenditure compression, despite the Atmanirbhar Bharat 3.0 announcements, as key downside risks for the economy.
It further said “However, the potential development and distribution of a vaccine by H1 2021 could prove to be an important buffer against these risks,”
