India handled COVID-19 pandemic better than estimated: SBI reports

India has handled the COVID-19 pandemic much better with the estimated confirmed cases, a research report by State Bank of India (SBI).

Speaking about the economy, another SBI research report titled "Five Months After Unlock", said it picked up momentum in September. The report titled, "India tackled COVID much better with our model cases 2.65 lakh lower than actual: Human psyche has not changed in 355 years" focuses on the various aspects the country went through during the pandemic phase.

Testing a two stage least square (2-SLS) panel model with 20 major states, taking the data April to October 2020, the report arrived at an estimated figure of 84.49 lakh COVID-19 cases in the country, "which is in fact 2.65 lakh higher than the actual confirmed cases of 81.8 lakh, thus India has done a good job on controlling the spread of the virus."

It, however, added that the state-wise numbers and performance varies with states like Maharashtra, Karnataka, Andhra Pradesh, Kerala, Chhattisgarh, West Bengal, Delhi and Tamil Nadu doing badly in terms of COVID-19 management. It also added that Uttar Pradesh, Bihar, Gujarat and Jharkhand among others have managed the situation quite well with estimated model cases more than actual cases.

"There are various visible behavioural changes that are associated with pandemics/epidemics. When the current pandemic and 1665 London plague are compared we see striking similarity in behavior changes including people becoming more altruistic and religious during both periods, preference of home cooked food, shortage of certain essential items, communities not taking it seriously until it arrives in their midst, the Government doing contact tracing and isolating the ones infected, certain manipulation of data so as to hide the true picture," the report elaborated. Further, it also added that, "assuming no major second wave, our non-linear least square model on data from March 1 to October 6 shows COVID-19 is likely to subside around February 19."

ILO has come up with estimates for working hours lost (per cent of total, average over first three quarters of 2020) and equivalent fiscal stimulus value for country groups to directly compare the size of fiscal stimulus with the labour market damage due to COVID-19.

"We conducted a similar exercise for India. Our results show a gap of around 10 per cent exists for India vis-a-vis a gap of 11.6 per cent in the lower-middle-income group. Thus a further direct fiscal stimulus of the size of 3-5 per cent of GDP might be required to offset gap between the equivalent fiscal stimulus hours and the loss in hours," the report said.

"Corporate results for Quarter 2 Financial Year 2020-21 show that companies producing essential goods have mostly witnessed strong results while those producing non-essential goods/services have mostly shown weaker results. Moreover, rating upgrades to downgrade ratio, though much below 1, has shown sign of improvement from Q1 (April-June) level," the second report said.

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 obe year for some indicators including manufacturing index, GST eway bills, vehicle sales, as per the report.

It also said the rail freight earnings continues to increase across segments, except for foodgrain, flours and pulses in October 2020 compared to September 2020. Power consumption data also shows an improvement in October over last month.

"October 2020 GST revenue is 10 per cent higher than the GST revenues in the same month last year. The positive trend, which started from September 2020 has sustained. E-way bills, which hit a record high of 5.74 crore in September 2020 have further grown in October 2020 to 6.42 crore," the report stated.

While UPI transactions have continued to grow in both value and volume with current values 1.7 times the pre-COVID levels, in the performance of banks, however, "in September credit has picked-up but not able to keep the momentum in October. ASCBs data for the fortnight ended 23 October 2020 indicates that credit grew by 5.1 per cent Year on Year (YoY) compared to last year growth of 8.9 per cent. While, on YTD basis credit growth contracted by 0.3 per cent compared to last year YTD growth of 0.7 per cent."

It further added that, based on the number of days it took for the new cases to rise again after declining from its first peak, India may witness a second wave with new cases started rising sometimes in end of first week of December or second week of December.