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Motilal Oswal Report
Our in-house Economic Activity Index (EAI) for India's real gross value added (GVA) (called EAI-GVA) contracted 7.0% YoY in June 2020 – its fourth successive decline – which implies that economic activity shrank 18.7% YoY in Q1 FY21.
Industrial activities contracted sharply by a fifth (compared to 33% fall in May 2020), while the services sector shrank only 3.6% YoY (supported by massive fiscal spending) in June 2020.
Farm activities grew 10.4% YoY the highest pace in nine years. EAI-GDP index (our in-house measure of official GDP) also contracted 4.8% YoY in June 2020, following a 19.7% decline a month ago and implying a decline of 18.4% YoY in Q1 FY21.
Very strong fiscal spending growth of 49% YoY supported EAI-GDP, without which the decline was 7.5% in June 2020.
Private consumption spending contracted 9% YoY and investments declined 30% YoY in June 20. Excluding government spending, EAI-GDP contracted 20% YoY in Q1 FY21
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