The hardy challenge of tracking economic activity in a pandemic


The mid-year monetary policy announcement scheduled to take place on 1 October has been postponed due  issues concerning the establishment of the Committee. In any case, the policy is just supposed to be a holding process. The decline in growth of 23.9 per cent in the first quarter (Q1) of the current fiscal year and the top line inflation above the safe limit of 6 per cent since December 2019  are not conclusive in either direction.

What has relieved the uncertainty that such a combination could cause is that both production declines and increased inflation tend from a number of studies to have occurred as a result of supply volatility. Fixing broken supply chains is better than resolving low demand.

E-way bills

Preliminary estimates of GDP are based on provisional figures for agricultural output and monthly figures for government spending, the Industrial Development Index and aggregate bank credit. A reasonably reliable monthly indicator available since April 2018 for freight transported by road and rail, generated by the amount of e-way bills, appears not to have been taken into account yet. Under GST, the mechanism and procedural rules of freight transport are laid out in the E-way bill. A registered GST individual is not permitted to transport goods in a vehicle if the value exceeds Rs. 50,000 (Single Invoice/Bill/Delivery Challenge) without creating an e-way bill.    Each e-way bill created has a unique 12-digit e-way bill number (EBN). Set up as a monitor on goods and services tax (GST) evasion. It was such a good measure that by July 2018, it had been implemented for intra-state cargo transportation as well. Unlike the GST, which was subcontracted to a private sector company with dire implications, the e-way bill enjoys a solid technical framework at the National Informatics Centre.

The volume of the eway bill is an indicator of the number of freight journeys. From   October 2018, the total monthly amount of e-way bills never fell below 50 million, until the first quarter of this year when it dropped to 26 million.  In July 2020, it had risen to 48.4 million, and in August it had risen to 49.4 million, which was in the neighborhood of the pre-pandemic figures. The figures from September might provide a relatively better indicator of the state of economic recovery,  in comparison to the Purchasing Manager Index (PMI), which covers a lesser geographical area. 

The constituents of the overall volume indicate that the inter-state share held steady at 40% over the full duration. There is no jaggedness in this portion, which may be suggestive of patchy implementation.

E-way bill volume remained constant at 50 million until December 2019, when the growth was cut short by the pandemic and the lockdown that ensued. It confirms the growth instability that began in April 2018, at around the same time as the e-way bill itself. Small micro-enterprises experienced low survival chances even before the pandemic. The revival of these through a huge nationwide endeavor is what will bring economic development back.

The hurdles

Many excellent policies, such as the Rs3 trillion provision for bank loan upgrades to small businesses,do not reach the micro enterprises that have rare dealings with banks.  database on small enterprises in India, which , in theory, should  have been in place from the field work carried out during the 7th Economic Census in 2019, is the first step to bridging this gap    

In an effort to resolve the data vacuum on economic activity in the region, the 13th Finance Commission bestowed a grant to states to create business databases for each district on the basis of projections of district domestic product, thereby providing a secure base for national and state-level domestic product more broadly. The vision plan for the 7th Economic Census states that only a few states have been able to set up any kind of database with that money, that too by bringing pulling lists under a number of acts.

The field survey conducted for the economic census would have met with opposition from small business interviewees on two grounds. One of them will be their source of credit. The second, which reared its head after the GST implementation, is the disclosure of turnover, as businesses attempt to evade GST registration and all that it means in terms of their pressure of compliance.

This information challenge can be solved by questioning local government leaders in small towns and large villages. Good academic studies are also available, but their emphasis is usually limited to the sector and/or the region. Multiple studies as such could be parallely analyzed and state or region wise implementation enforced


The pandemic hit the Indian economy, and hit it hard. Effective and widespread measures for revival are being taken to revive the economy. However, there is no easy, straight forward way to measure or track the activity by extension, the recovery. E-way bills could perhaps provide an excellent indicator, especially if a robust database of small and micro industries and enterprises are in place. Be sure to check out for Debt Consolidation Loans in Singapore.