Economic activity showed record expansion in the week ending August 8, according to the widely watched Nomura India Business Resumption Index (NIBRI), which soared to stand at 99.4, up from 94.0 last week, mainly because of Covid-19 cases remaining under control and higher mobility of people, according to data released on Monday.
"This index is near the pre-pandemic level of 100, and surpassing the pre-second-wave peak (of 99.3 in mid-February)," said research analyst Sonal Varma in a note.
The Nomura India Business Resumption Index is compiled with data from various trackers, such as Google, Apple driving index and electricity demand. These are known as high-frequency data because they change frequently.
After briefly plateauing, mobility picked up sharply, with Google workplace, retail and recreation and Apple driving index rising by 7.4 percentage points, 5.3 percentage points and 6.7 percentage points, respectively, the latest data showed. A percentage point is equal to a 100 basis points, while a basis point is one-hundredth of a percentage point.
Electricity consumption is key indicator of the pace of economic activity. According to the Nomura index, power demand rose 5.3% week on week after shrinking for three consecutive weeks.
The labour participation rate rose to 41.5% from 39.8% previously. This means more people are looking for jobs, which has pushed up the unemployment rate to 8.1%.
The business resumption index soared in part because coronavirus disease cases "remain flat at 40,000 per day", Nomura, a securities firm, said.
With nearly 5 million doses of vaccination a day, the "vaccination pace is higher than the daily rate of 3.9 million in June" it said.
These data, however, vary widely throughout states, and states such as Karnataka and Tamil Nadu have increased restrictions, while Maharashtra has announced further relaxations.
"Overall, the latest rise in the NIBRI corrects its plateauing since mid-July, and suggests the swifter-than-expected recovery from the second wave slump has continued in early August. Whether the surge in mobility, in turn, triggers a third wave is a key risk that we continue to monitor," Varma said.