Economic recovery expected to become strong in coming months: PHD Chamber

No. PR- 058

July 22, 2021

New Delhi

The PHDCCI Economic and Business Momentum (EBM) Index

Economic recovery expected to become strong in coming months: PHD Chamber

Though, the economic recovery slowed in May 2021 due to daunting impact of second wave of Covid-19, the decline in new COVID cases and gradual unlocking in many parts of the country have given way for rebound in the economic recovery once again, said Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry, in a press statement issued here today.

Lead economic and business indicators have shown a higher growth in May 2021 as compared with May 2020. PHDCCI Economic & Business Momentum (EBM) Index of 25 lead economic and business indicators at 94.8 for May 2021 is higher as compared with 85.7 for May 2020 at the base of 2018-19 = 100, said Sanjay Aggarwal.

Economic  recovery so far (Y-o-Y)


PHDCCI EBM Index 2018-19=100 May 2017 May 2018 May 2019 May 2020 May 2021
96.1 99.7 101.2 85.7 94.8

Source: PHD Research Bureau, PHDCCI EBM Index

Lead economic and business indicators such as steel, intermediate goods, merchandise exports, GST collections and SENSEX have shown a noteworthy improvement in May 2021 as compared to the May 2020, said Sanjay Aggarwal.

The recovery trend in key economic indicators is indicating strengthened growth trajectory of Indian economy in the coming months, said Sanjay Aggarwal

However, sequentially, the PHDCCI EBM Index has shown a decline for May 2021 to the level of 94.8 as compared to 100.3 for April 2021, due to drastic impact of the second wave on trade and industry in respect of the partial/complete lockdowns in many States, labour shortage, skyrocketing commodity prices and depressed demand, said Sanjay Aggarwal.

Economic recovery so far (Sequential)


PHDCCI EBM Index 2018-19=100 January 2021 February 2021 March 2021 April 2021 May 2021
99.3 99.3 100.3 100.3 94.8

Source: PHD Research Bureau, PHDCCI EBM Index

Based on the May economic activity and movement of EBM Index, a significantly higher growth trajectory is anticipated for Q1 FY 2021-22. The quarterly movement of PHDCCI EBM Index and quarterly GDP growth rates are highly correlated at 0.9 as depicted in Chart-2, said Sanjay Aggarwal.


  Chart-1 : PHDCCI EBM Index: Monthly Trend (Base: 2018-19=100) Chart-2 : PHDCCI EBM Index (Base: 2018-19=100) and GDP Growth Rates (in %): Quarterly Trend

Source: PHD Research Bureau, PHDCCI EBM Index; GDP growth figures compiled from MOSPI


Going ahead, effective policy measures are needed to support demand and to have a multiplier effect on production possibilities, expansion of employment in factories, expansion of capital investments and overall virtuous circle of the growth trajectory, said Sanjay Aggarwal.

There is a need to lower interest rates for consumers and businesses, lesser compliances for MSMEs vis-à-vis ease of doing business at the ground level and a lower tax regime to increase the personal disposable income of the people, he said.

To re-build for the high growth trajectory, the Government should frontload the National Infra Pipeline expenditure as private investment are not coming in shorter period. The increased spending on infrastructure will give a multiplier effect to rejuvenate the aggregate demand in the economy. Undoubtedly, robust growth of infrastructure is the key ingredient to realize the vision of Aatmanirbhar Bharat, said Sanjay Aggarwal.

More and more direct benefit transfers needs to be considered for the urban and rural poor under the various welfare schemes in addition to the free distribution of dry rations till Diwali as already announced by the Hon’ble Prime Minister, he said

Let’s target to vaccinate at least half of the population in the next 2 months, i.e. by September 2021, said Sanjay Aggarwal.

PHDCCI EBM (Economic and Business Momentum) Index has shown steady recovery from the lows of 78.3 for April 2020 to 100.3 for April 2021 and 94.8 for May 2021 as compared with 85.7 for May 2020, with a base of 2018-19=100.

PHDCCI EBM Index is a composite index of 25 lead economic and business indicators with base year at 2018-19=100, which considers the demand and supply indicators to present a broad perspective of the economy. The 25 indicators include the IIP Consumer durable goods, IIP Consumer non-durable goods, IIP Capital Goods, IIP Intermediate Goods, Coal, Crude Oil, Natural Gas, Petroleum Refinery Products, Fertilisers, Steel, Cement, Electricity, Consumption of Petroleum products, Export Merchandise, Export Services, India Freight Traffic, Credit to Agriculture, Credit to Industry, Credit to service sector, Personal Loans, GST Collections, SENSEX, FDI Equity Inflows, External commercial borrowings and Unemployment.

Full PHDCCI EBM Index report attached



Base: 2018-19=100

Sr No Economic Indicators May-20 May-21 (May’21 – May ’20)
1 IIP Consumer durable goods 33 65 32
2 IIP Consumer non-durable goods 104 105 1
3 IIP Capital Goods 36 66 30
4 IIP Intermediate Goods 67 105 37
5 Coal 95 101 7
6 Crude Oil 85 79 -5
7 Natural Gas 86 103 17
8 Petroleum Refinery Products 86 99 13
9 Fertilisers 109 98 -10
10 Steel 67 107 40
11 Cement 90 97 7
12 Electricity 103 111 8
13 Consumption of Petroleum products 95 93 -2
14 Export Merchandise Growth 85 144 59
15 Export Services 123 127 4
16 India Freight Traffic 97 108 12
17 Credit to Agriculture 104 110 7
18 Credit to Industry 102 101 -1
19 Credit to service sector 111 102 -9
20 Personal Loans 111 112 2
21 GST Collection 62 103 41
22 SENSEX (Daily average) 113 181 67
23 FDI Equity Inflows 60 73 13
24 External commercial borrowings 81 40 -41
25 Unemployment 84 93 9
Composite Weighted Index 86 95 9

Source: PHD Research Bureau, PHDCCI EBM Index Note: For calculation purpose, the FDI figure for April and May 2021 are moving average of last 3 months; figures are rounded off


Media Division

PHD Chamber of Commerce and Industry