The June Monthly Economic Report by the Finance Ministry mentions signs of "early green shoots."

"Early green shoots of economic revival have emerged in May and June with real activity indicators like electricity and fuel consumption, inter and intra-state movement of goods, retail financial transactions witnessing pick up,” says the report.

Total digital retail financial transactions via NPCI platforms have increased sharply. Consumption of petroleum products increased by 47 percent and year-on-year contraction has moderated from (-) 45.8 percent to (-) 23.2 percent across April-May.

Kharif sowing is twice that of previous year’s acreage. Rabi procurement is in full flow in the respect of oilseeds, pulses and wheat. Electricity consumption saw lower year-on-year contraction in growth rates. E-way bills are up by 34 percent in June over May 2020. Railway freight traffic has improved by 26 percent in May over April. Average daily electronic toll collections are up from Rs 8.25 crore in April to Rs 36.84 crore in May to Rs 50.9 crore in June. And Purchasing Manager's Index is up from 27.4 in April to 30.8 in May further to 47.2 in June.

Second wave of infections

But the report also makes a reference to concerns over the second wave of infections as the economies across the globe open.

“There is a risk of a ‘second wave of infections’ as the economies unlock. The uncertainty associated with flattening of the COVID-19 curve, in the absence of a vaccine, poses a serious challenge,” the Finance Ministry report says.

“With huge uncertainty around the pandemic stemming from the unknown, and the inability to plan for or know what’s next, such uncertainty is expected to adversely affect the business climate and make firm delay their investment plans,” the report says.

It said that the lock-down and social distancing measures have had an adverse effect on the economy as there is an unavoidable trade-off between flattening the infection curve and steepening of the recession curves.

First Published:Jul 6, 2020 8:10 PM IST