SBI business activity index dips to new low of 75.7 in April; says India might reach its second peak in mid-May

India is going through a tough phase due to the second wave of the coronavirus pandemic. Several measures have been adopted by the state and central government to curb the spread of the virus. Many states have also imposed lockdown like restrictions which have hit the economic activities including the functioning of the banking sectors.

According to the SBI Ecowrap report, the State Bank of India (SBI) business activity index has declined to hit a new low of 75.7 in April 2021 as it is 24.3 percent down from the pre-pandemic level. The bank had earlier attained this level in August 2020.

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The SBI’s economic research report also revealed that except for labour participation and electricity consumption, all other indicators have declined significantly during April and hinted that labour market disruptions are still manageable, unlike the first wave.

The recovery rate was noted at 97 percent in the country at the beginning of the second wave which is now at 82.5 percent, said the report. The reduction of 14.5 percent in the recovery rate has happened over a period of 69 days.

Analysing the experience of other countries, the report said that India might reach its second peak when the recovery rate will be at 77.8 percent. It added that every 1 percent reduction in recovery rate takes around 4.5 days, which means that it will take around 20 days from now to reach the peak.

Also, every 1 percent reduction in recovery rate increases active cases by 1.85 lakh, the report said. Hence it is believed that around mid-May, India will witness the peak of the second wave with active cases reaching around 3.6 million or 36 lakh at that point of time.

As per the report, active cases in Maharashtra is expected to reach 9.5 lakh at the time of the second peak from its current level of 6.7 lakh. It will contribute to around 26 percent in total active cases estimated. Maharashtra will be followed by Karnataka with 3.5 lakh expected active cases from its current level of 3.0 lakh.

India reported a record single-day surge of 3,79,257 new coronavirus cases in the last 24 hours, according to the Union Health Ministry data on Thursday.