A study report published in Chicago Booth concluded a V- shape recovery in India while analyzing some of the recovery indicators in the economy. India had a year-on-year increase in GST and gross income tax collection revenue along with improvements in industrial activity, selectivity generation and Indian stock market index such as Nifty50. V shape recovery can be observed when economic activity rises back to the level of recession after a sharp decline. Under many economic situations, it is considered as one of the best ways of recovery trajectory.
The unemployment rate in India came to the level of pre-pandemic time of 7-8 per cent after a projection to 23.5 per cent in April month. However, the study shows that employment to population ratio has not returned to its pre-lockdown levels.
Research and analysis identified that labor market opportunities got worsened, thus producing low income and negative pressure on consumption. In addition to that, only a few occupations have been spared from the negative income shock created by the ongoing pandemic conditions. The sill persisting negative impacts are not contributing to a perfect picture of V- Shape recovery. After a continuous better performance in the Industrial Production Index, the trend got reversed in August and petroleum products demands are still below 2019 levels.
Among Indian states, Chhattisgarh, Pondicherry, Delhi and Tamil Nadu witnessed the largest income loss due to lockdown with income per capita dropping by 77 per cent, 71 per cent, 66 per cent, and 65 per cent, respectively, in comparison with last year.