PHDCCI Economy GPS Index April 2021

No. PR- 025

May 5, 2021

New Delhi

PHDCCI Economy GPS Index April 2021

Pandemic creates incipient signs of economic slowdown: PHD Chamber

Though broad based economic recovery remained intact amid pandemic in the month of April 2021 and Economy GPS went up to all time high at 127.2 at a base year of 2018-19 equal to 100, the re-emergence of pandemic situation with partial lockdowns and curfews in many parts of the country has created incipient signs of economic slowdown in the coming months said Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry in a press statement issued here today.

The sequential growth of passenger vehicles declined by (-)1.5% from 2,90,939 units in March 2021 to 2,86,450 units in April 2021. The average of daily close of SENSEX also declined by (-)2.4% from 50101 in March 2021 to 48878 in April 2021. The sequential growth of GST collections increased by 14.1% from Rs. 1,23,902 crore in March 2021 to Rs. 1,41,384 crore in April 2021.

The strong growth of GST collections may also be partly attributed to the significant acceleration in input costs vis-a-vis increase in commodity prices, said Sanjay Aggarwal

The second wave of Covid-19 has struck like a storm throughout the country. Pandemic has entered every household and is affecting the life of every one, said Sanjay Aggarwal

Savings of the households are diverting towards medical expenses of their family members to save their lives. The entire economic activity is severely impacted with the closure of offices and shops. It has created uncertain economic environment causing subdued demand and investment activity in the country, he said

On a monthly basis, PHDCCI Economy GPS Index had shown sharp recovery from the lows of 39.6 in April 2020 to 50.1 in May 2020, 75.1 in June 2020, 85.6 in July 2020, 90.5 in August 2020, 100.2 in September 2020, 109.6 in October 2020, 106.9 in November 2020, 114.9 in December 2020, 121.7 in January 2021, 122.0 in February 2021, 122.9 in March 2021 and 127.2 in April 2021. There is a strong correlation between the GDP and GPS at the rate of 0.8, as depicted in the Chart 2 below.

Chart 1: GPS Index: Monthly Trend Chart 2: Movement of GDP and GPS over the quarters
Source: PHD Research Bureau, PHDCCI Economy GPS Index

Note: GDP growth rate figure for Q4 FY 2020-21 is projection made by PHDCCI. The value of Economy GPS Index of Q1 FY 2021-22 is taken as the value of April 2021 economy GPS index.

Going forward, there is a need to fuel the drivers of household consumption and private investments to enhance aggregate demand in the economy with calibrated and well-timed steps, said Sanjay Aggarwal.

Demand creation will have an accelerator effect on expansion of capital investments in the country. Additionally, greater infrastructural spending by the government would help to stimulate confidence among firms and households, generating stronger consumption, investment and employment upturns, he said.

We request an adequate stimulus to support the economy, trade and industry in this extremely difficult time. Last year in 2020-21, the effective policy stimulus pulled the economy from the lows of (-) 24% in Q1 to (-) 7.5% in Q2 and +0.4% in Q3. Going ahead, trade and industry need a continued hand holding with an adequate stimulus to create effective strides for futuristic growth trajectory of Indian Economy, said Sanjay Aggarwal

PHD Chamber of Commerce and Industry (PHDCCI) Economy GPS Index is a composite index of 3 lead economic and business indicators with base year at 2018-19=100, which measures the broad economic and business activity. The PHDCCI Economy GPS Index, based on the monthly values of three high frequency indicators viz., GST collection (Rs. Crore), Passenger Vehicle Sales (units) and SENSEX (daily average), helps to find the direction of the economy. The three broad indicators are representing not only demand and supply but also revenue growth of the government and financial markets movement in the country. GST collections indicate the momentum of business activity, passenger vehicle sales is broad indicator of demand activity in the economy and movement of SENSEX indicate mood of the investors both domestic and foreign and India’s attractiveness to the foreign investors on the back of various reforms undertaken by the government, said Sanjay Aggarwal

Table 1: Movement of Economy GPS over the months


Month- Year Economy GPS Index
Jul-17 72.3
Aug-17 96.8
Sep-17 98.2
Oct-17 94.9
Nov-17 92.0
Dec-17 88.0
Jan-18 96.7
Feb-18 93.6
Mar-18 97.8
Apr-18 102.1
May-18 100.1
Jun-18 97.7
Jul-18 100.9
Aug-18 101.2
Sep-18 101.4
Oct-18 99.8
Nov-18 97.4
Dec-18 93.7
Jan-19 101.4
Feb-19 98.8
Mar-19 105.6
Apr-19 104.0
May-19 98.1
Jun-19 97.3
Jul-19 94.3
Aug-19 91.0
Sep-19 92.4
Oct-19 102.0
Nov-19 103.9
Dec-19 101.0
Jan-20 107.1
Feb-20 103.2
Mar-20 80.0
Apr-20 39.6
May-20 50.1
Jun-20 75.1
Jul-20 85.6
Aug-20 90.5
Sep-20 100.2
Oct-20 109.6
Nov-20 106.9
Dec-20 114.8
Jan-21 121.7
Feb-21 122.0
Mar-21 122.9
Apr-21 127.2

Source: PHD Research Bureau, PHD Chamber



Media Division

PHD Chamber of Commerce and Industry