The PHDCCI Economic and Business Momentum (EBM) Index

No. PR- 229

February 22, 2021

New Delhi

The PHDCCI Economic and Business Momentum (EBM) Index

Economic activity reaching at its pre-COVID levels, FY 2021 Q3 GDP growth seen positive at 0.1 to 1%: PHD Chamber

The economic activity is reaching at its Pre-Covid levels and the continuous improvement in the key economic and business indicators is strengthening the expectations of a positive GDP growth trajectory, said Mr. Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry in a press statement issued here today

On the basis of recent movement of PHDCCI EBM Index, PHD Chamber projects 0.1% to 1% growth rate of GDP in Q3 2020-21, said Mr. Aggarwal

According to the PHDCCI Economic & Business Momentum (EBM) Index, the 25 lead economic and business indicators have shown a significant recovery in Q3 FY 2020-21. The composite PHDCCI EBM Index has moved from 85.2 in Q1 FY 2020-21 to 96.0 in Q2 FY 2020-21 and 98.1 in Q3 FY 2020-21.

The quarterly movement of PHDCCI EBM Index and quarterly GDP growth rates are highly correlated at 0.9 as depicted in Chart-2, said Mr. 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 figures for Q3 and Q4 FY 2020-21 are projections based on PHDCCI EBM Index

Lead economic and business indicators such as cement, steel, consumer durables, capital goods, GST collections, passenger car sales have shown a marvelous improvement in the recent months, said Mr. Sanjay Aggarwal

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, 96.9 in October 2020, 98.3 in November 2020 and 99.0 in December 2020 with a base of 2018-19=100, said Mr. Aggarwal

The 25 indicators composite EBM Index of the December 2020 at 99.0 is very near the level of 99.3 in December 2019, he said

However, the EBM Index during the period April – December of FY 2020-21 stands at 93.1 as compared with April – December FY 2019-2020 at 99.6, said Mr. Aggarwal

On the basis of recent movement of EBM, the overall GDP growth rate in FY 2020-21 is projected at (-)7.2% which is a positive revision of (+) 0.7% from our early forecast of (-) 7.9% made in September 2020, said Mr. 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 parameters to present a broad perspective of the economy. Out of the 25 lead economic and business indicators, 21 have shown a remarkable improvement in December 2020 from their lows of April 2020, said Mr. Sanjay Aggarwal.

The growth trend of PHDCCI EBM Index suggests that economy has potential to accelerate a growth rate of 11% in the next financial year 2021-22 on the back of various effective and meaningful reforms undertaken by the Government, said Mr. Sanjay Aggarwal.

Going ahead, the re-opening of higher educational institutes will support the demand at this juncture and help capex expansion with broad based recovery in economic activity, said Mr. Sanjay Aggarwal.

At this juncture, immediate policy attention is required towards credit access to industry and services sectors. Credit disbursement should be at the top most priority at this juncture by the banking sector, he said

The focus should be on ensuring provision of hassle free disbursements of loans vis-à-vis enhanced liquidity for MSMEs, especially in rural sectors, said Mr Sanjay Aggarwal.

The Union Budget 2021-22 presented by Mrs Nirmala Sitharaman, Hon’ble Finance Minister is a historic budget, considering the aspirations of all sections of the society for the improvement of standards of living and ease of doing business in industry across the segments, said Mr. Sanjay Aggarwal.

The focus of budget on six pillars, including Health and Well-Being, Physical and Financial capital and infrastructure, Inclusive Development for Aspirational India, Reinvigorating Human Capital, Innovation and Research & Development, and Minimum Government, and Maximum Governance is highly encouraging and would go a long way to build a New India, he said

Going ahead, demand creation will 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.

The increased spending on infrastructure will give a multiplier effect to rejuvenate the aggregate demand in the economy and to mitigate the daunting impact of COVID-19 on the economy. Undoubtedly, robust growth of infrastructure is the key ingredient to realize the vision of Aatmanirbhar Bharat, said Mr Sanjay Aggarwal.

The Government’s decision to set-up a Development Finance Institution (DFI), capitalised with Rs 20,000 crore to launch the National Asset Monetisation Pipeline to fund new infra projects is highly appreciable, said Mr Sanjay Aggarwal.

Also, 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, said Shri Sanjay Aggarwal.

PHDCCI EBMI (Economic and Business Momentum Index) is a composite index of lead economic and business indicators including 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 April 20 December 20 Improvement (December ’20 – Apr’20)
1 IIP Consumer durable goods 5 105 101
2 IIP Consumer non-durable goods 64 123 59
3 IIP Capital Goods 8 97 89
4 IIP Intermediate Goods 39 121 82
5 Coal 97 110 13
6 Crude Oil 86 84 (-)2
7 Natural Gas 86 89 3
8 Petroleum Refinery Products 81 102 20
9 Fertilisers 101 108 6
10 Steel 22 117 95
11 Cement 17 125 108
12 Electricity 88 114 26
13 Consumption of Petroleum products 61 115 57
14 Export Merchandise 50 114 64
15 Export Services 121 137 16
16 India Freight Traffic 98 110 12
17 Credit to Agriculture 104 109 6
18 Credit to Industry 102 99 (-)3
19 Credit to service sector 111 109 (-)2
20 Personal Loans 112 110 (-)3
21 GST Collections 32 115 83
22 SENSEX 112 168 55
23 FDI Equity Inflows 74 150 75
24 External commercial borrowings 54 162 108
25 Unemployment 84 95 11
Composite Weighted Index 78 99 21

Source: PHD Research Bureau, PHDCCI EBM Index

Note: For calculation purpose, the October, November and December 2020 FDI figures are estimated on the basis of available data; figures and difference are rounded off


Media Division

PHD Chamber of Commerce and Industry