The PHDCCI Economic and Business Momentum (EBM) Index

No. PR- 041

May 21, 2021

New Delhi

The PHDCCI Economic and Business Momentum (EBM) Index

Economy recovered to Pre-COVID levels in March 2021, 2nd wave poses challenges to double digit economic growth: PHD Chamber

Though economic activity recovered to pre-COVID levels in March 2021, the rapid re-spread of corona cases in 2nd wave of COVID and resultant strict restrictions in many parts of the country have posed severe challenges to double digit economic growth in FY 2021-22, said Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry, in a press statement issued here today.

PHDCCI Economic & Business Momentum (EBM) Index of 25 lead economic and business indicators has registered an increase in March 2021 to the level of 99.9 as compared to 99.5 in February 2021 and 99.7 in January 2020, at the base of 2018-19 = 100

Lead economic and business indicators such as cement, steel, consumer durables, GST collections, external commercial borrowings and FDI equity inflows have shown a marvelous improvement in March 2021, said Sanjay Aggarwal.

However, the second wave of Coronavirus has swamped the country at a rapid rate with more severe impact than the previous wave in 2020, said Sanjay Aggarwal.

The partial/complete lockdowns in many States and strict restrictions in various regions across the country have created an uncertain economic environment, with depressed demand and investment scenario, said Sanjay Aggarwal.

The supply chain disruptions are causing skyrocketing commodity prices, which have severely impacted the price cost margins of the businesses in the difficult pandemic time of coronavirus. The increase in costs of raw materials is affecting the MSMEs which are already struggling because of pandemic impact and squeezed working capital, said Sanjay Aggarwal.

Households are shifting their savings towards fulfilling the medical needs of their family members along with deferment of their expenditure on non-essential items, said Sanjay Aggarwal.

At this juncture, the Government has to step up with proactive and calibrated measures to mitigate the daunting impact of Coronavirus 2.0 on people, industry, trade and economy, as it did during the last year in 2020, said Sanjay Aggarwal.

On the basis of recent movement of PHDCCI EBM Index, PHD Chamber projects more than 1% growth rate of GDP in Q4 FY 2020-21 and overall GDP growth of FY 2020-21 at (-) 7.9%. 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

Note: GDP growth figure for Q4 FY 2020-21 is projection based on PHDCCI EBM Index

Going ahead, to attain a higher growth trajectory, effective policy measures are needed once again to support demand creation and to have a multiplier effect on enhanced production possibilities, expansion of employment in factories, expansion of capital investments and overall virtuous circle of growth and development of Indian economy, said Sanjay Aggarwal.

A substantial stimulus to create effective strides for futuristic economic growth trajectory would be crucial in this extremely difficult time, 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

Sanjay Aggarwal has urged for the speedy vaccination of all population along with enhanced production possibilities of the vaccine at domestic level to diminish the pandemic impact on people and economy.

PHDCCI EBM (Economic and Business Momentum) Index has shown steady recovery from the lows of 78.3 in April 2020 to 85.7 in May 2020, 91.6 in June 2020, 95.5 in July 2020, 95.9 in August 2020, 96.5 in September 2020, 96.8 in October 2020, 98.4 in November 2020, 99.2 in December 2020, 99.7 in January 2021, 99.5 in February 2021 and 99.9 in March 2021, with a base of 2018-19=100. The EBM index during the period April –March of FY 2020-21 stands at 94.7 as compared with 99 in April –March FY 2019-2020, said Sanjay Aggarwal.

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 Apr-20 Mar-21 (Mar’21 – Apr ’20)
1 IIP Consumer durable goods 5 101 96
2 IIP Consumer non-durable goods 64 115 51
3 IIP Capital Goods 8 76 69
4 IIP Intermediate Goods 39 114 75
5 Coal 97 97 -1
6 Crude Oil 86 85 -2
7 Natural Gas 86 98 12
8 Petroleum Refinery Products 81 104 23
9 Fertilisers 101 90 -11
10 Steel 22 112 90
11 Cement 17 130 113
12 Electricity 88 121 33
13 Consumption of Petroleum products 58 116 58
14 Export Merchandise Growth 50 116 67
15 Export Services 121 149 29
16 India Freight Traffic 98 106 8
17 Credit to Agriculture 104 112 8
18 Credit to Industry 102 100 -1
19 Credit to service sector 111 101 -10
20 Personal Loans 112 110 -2
21 GST Collection 32 124 92
22 SENSEX (Daily average) 112 182 69
23 FDI Equity Inflows 74 202 127
24 External commercial borrowings 54 504 450
25 Unemployment 84 98 13
Composite Weighted Index 78 100 22

Source: PHD Research Bureau, PHDCCI EBM Index Note: For calculation purpose, the FDI figures for Jan, Feb & Mar 2021 are moving averages of last 3 months; figures and difference are rounded off


Media Division

PHD Chamber of Commerce and Industry