COVID-19India Economic MonitorAugust 2020 Update

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Executive Summary

Source: MoHFW, POSOCO, MOSPI, Ministry of Commerce & Industry, RBI, GST Network, NPCI, NETC, Ministry of Railways, AAI, JNPT, AIOCD, mFMS, Joint Plant Committee, Ministry of Steel, Ministry of Commerce & Industry, SIAM, CMIE, IRDAI, Ministry of Finance, GST Council, Ministry of Rural Development, Analyst reports, BCG analysis

Trends across key economic indicators• Industrial Activity: Signs of recovery in industrial activity as seen in uptick in power consumption (YoY gap declined to 4% in July'20 vs. 10% in June'20), fuel

consumption (YoY gap declined to 3% in July'20 vs. 8% in June'20) and Index of Industrial Production witnessed 20% growth in June'20 compared to May'20

• Trade: Services trade less impacted as compared to merchandize trade in April-June'20 period; stronger recovery recorded in merchandize exports vs. imports

in July'20 (Merchandize exports declined 10% while imports declined 28% YoY in July'20)

• Logistics: Recovery seen in domestic logistics - E-way bills, FASTag transactions & railway freight vs. April-June'20 (Railway freight traffic increased 13% in

June'20 vs. May'20, FASTag transactions increased 6% in July'20 vs. June'20, E-way bills generated increased 11% in July'20 vs. June'20)

• Financial Services: Deposit growth remains stable at ~11% in July'20 while credit growth declined from 6.2% YoY in June'20 to 5.8% YoY in July'20; Faster

recovery in volume of NPCI retail transactions vs. value, indicating increase in small purchases; Value of UPI transactions increased to INR 2.91 Tn i.e. by 11%

in July'20 vs June'20 (INR 2.62 Tn), 98% vs July'19 (INR 1.46 Tn), an all time high

• Sector-wise Impact: Auto sales saw an improvement in July'20 vs. previous months, though still below last year's levels (In July'20, Passenger vehicle sales

grew 67% MoM, 2W sales grew 21% MoM, however tractor sales declined 28% MoM, but grew 36% vs. July'19); Signs of recovery witnessed in cement

production and finished steel consumption in May-July'20 period, however gap still exists from pre-COVID levels; Recovery signs in both Life and non-Life

Insurance - positive YoY growth in July'20 (Life: 7% YoY; 18% YoY Non-life)

• Macroeconomic Indicators: India’s fiscal deficit reached INR 8.21 Tn (103% of budget estimate) in April-July'20; GST collection dipped 4% (from INR 0.91 Tn

to 0.87 Tn) in July'20 vs June'20; MGNREGA job demand observed a steep rise (71% in June, 73% in July'20, YoY), highest in last 8 yrs.; Foreign exchange

reserves rose to $523 Bn in last week of July'20, a new peak

• Sentiment: Sentiment of rural and urban consumers remained stable (Rural: from 43 in June to 45 in July-Aug'20; Urban: from 38 in June to 41 in July-Aug'20)

vs Rural: 48 & Urban: 42 during peak lockdown, however significantly below last year i.e. Rural: 104 & Urban: 106; Manufacturing PMI contracted from 47.2 in

June'20 to 46 in July'20 & Services PMI witnessed a marginal uptick from 33.7 in June'20 to 34.2 in July'20

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COVID-19 cases in India still on a continuous rise

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

01-

Apr

Total cases

30-

Apr

31-

May

30-

Jun

31-

Jul

31-

Aug

11.2x 5.2x3.4x

2.9x

2.1x

RecoveredDeaths Active cases

Total cases 33k 182k 1.7M 3.7M

Active cases 24k 90k 565k 785k

Days Doubling Rate 11 15 20 32

Recovery Rate 25% 48% 65% 77%

Test Positivity Rate 3.7% 4.7% 8.8% 8.5%

Fatality Rate 3.2% 2.8% 2.2% 1.8%

Source: Ministry of Health & Family Welfare (MoHFW); covid19india.org; BCG analysis

Data as of 31 Aug

567k

215k

19

59%

6.4%

3.0%

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Summary: Trends for the last 7 months show an uptick in July'20 vs. the Aprlows; however gap still exists with pre-COVID levels across most indicators

Indicator Unit Jan Feb Mar Apr May Jun Jul

Industrial Activity

Power Consumption MU 3% 11% -9% -24% -15% -10% -4%

Petroleum Consumption MT 0% 4% -18% -46% -23% -8% -3%

Index of Industrial Prod. Index 2% 5% -18% -58% -35% -17% NA

Trade

Services Export USD 7% 7% 1% -9% -10% -8% NA

Services Import USD 9% 13% -2% -18% -20% -15% NA

Merchandize Export USD -2% 3% -35% -60% -36% -12% -10%

Merchandize Import USD -1% 2% -29% -60% -52% -48% -28%

Logistics

E-Way Bills Generated Mn 12% 14% -26% -84% -53% 18% -7%

Railway Freight Originated MT 3% 6% -14% -35% -21% -8% NA

JNPT Container Traffic TEUs -3% 1% -13% -37% -39% -29% -20%

Air Freight kT -1% -1% -32% -83% -68% -40% -34%

Financial Services

NPCI Retail Txns. (Values) INR 19% 35% -4% -50% -29% -2% -4%

NPCI Retail Txns. (Volume) Mn 59% 56% 24% 7% 22% 39% 37%

Total Bank Credit INR 7.18% 6.26% 6.12% 6.98% 6.38% 6.21% 5.86%

Total Bank Deposits INR 9.70% 9.04% 8.49% 9.68% 10.63% 11.13% 11.03%

Indicator Unit Jan Feb Mar Apr May Jun Jul

Sector-wise Impact

Cement Production MT 5% 8% -25% -85% -21% -7% NA

Steel Consumption MT 5% 5% -23% -87% -53% -29% -9%

Passenger Vehicle Sales k -12% -10% -56% -99% -83% -51% -14%

Tractor Sales k 3% 20% -50% -80% 1% 20% 36%

Two-wheeler Sales k -11% -15% -36% -98% -81% -38% -20%

Fertilizer Sales MT 11% 53% 18% 45% 98% 79% 34%

Gross Premium (Life) INR 18% 2% -32% -33% -25% -10% 7%

Gross Premium (Non-Life) INR 7% 8% -11% -9% -11% 8% 18%

Pharma. Sales INR 8% 12% 9% -11% -9% 2% 0.2%

Chemical Production Index Index 3% 3% -2% -17% -28% -34% NA

Macroeconomic Indicators

Total GST Collection INR 8% 8% -8% -72% -38% -9% -15%

Central Govt. Expenditure INR Tn 1.6 2.0 2.2 3.1 2.0 3.0 2.4

MGNREGA Jobs Demand HHs -11% 5% 2% -40% 45% 71% 73%

MGNREGA Jobs Provided HHs -13% 5% -1% -35% 56% 80% 83%

No. of Tenders Announced k -5% -10% -4% 7% 17% 29% 125%

Sentiment

India VIX Index 17.4 23.2 64.4 34.0 30.2 29.1 24.7

PMI (Manufacturing) Index 55.3 54.5 51.8 27.4 30.8 47.2 46.0

PMI (Service) Index 55.5 57.5 49.3 5.4 12.6 33.7 34.2

Data for 2020; YoY growth represented for all indicators (except for India VIX, PMI and Central govt. expenditure – absolute values represented for Central govt. expenditure)

1

2

3

4

5

6

7

Source: POSOCO, PPAC, MoSPI, RBI, Ministry of Comm. & Industry, GST Network, Ministry of Railways, JNPT, AAI, NPCI, JPC, Ministry of Steel, SIAM, CMIE, mFMS, IRDAI, AIOCD, American Chemistry Council, GST Council, Ministry of Finance, Controller General of Accounts, Ministry of Rural Development, Projects Today, Bloomberg, NSE, BSE, IHS Markit, BCG analysis

Data as of 31 Aug

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Daily Average Power Consumption

Volume1 ('000s MUs)

IIP2 (Index of Industrial Production) &

ICI3 (Index of Core Industries)4

137 134

117

5490

108

137 134 133

82

107113

0

50

100

150

Jan

-20

Ma

r-20

Fe

b-2

0

Ap

r-2

0

May-

20

Jun

-20

1.5

3.0

0.0

1.0

3.5

2.5

0.5

2.0

4.0

3.6

Un

lock

3.0

Lo

ckd

ow

n 3

.0

3.93.5

3.42.9

Pre

CO

VID

-19

3.7

2.83.6

Lo

ckd

ow

n 1

.0

3.8L

ock

do

wn

2.0

3.2

4.04.0

Lo

ckd

ow

n 4

.0

3.5U

nlo

ck 1

.0

3.8

3.6

Un

lock

2.0

3.7

2019 2020

-23% -8%

5

20

10

15

0

15.7

13%

38%

37%

12%

32%

9.9

Jan

-20

4%14%

14%

39%

Fe

b-2

0

Jun

-20

3%13%

35% 22%

32%

1%10%

33%

Ap

r-2

0

35%

1%

14%

12%

14.6

34%

May-

20

34%

13%1%

13% 16.1

39%

33%35%

14%1%

14%

Jul-

20

34%

18.2

16%

Ma

r-2

0

4%

18.5 16.2-15%

ATF

LPG Petrol

Diesel

Others5

4% -46%-18%YoY

growth

Consumption of Petroleum Products

(in MMT)

0%YoY

growth-10% -4%-25% -18%-24%-4% -11%

IIP ICI

-3%-2%

Power & fuel consumption have largely recovered to last year levels in July'20; IIP shows signs of recovery in May-June'20

INDUSTRIAL ACTIVITY

1

1. Pre-COVID-19 period refers to 15 Mar -24 Mar , Lockdown 1.0 = 25 Mar - 19 Apr, Lockdown 2.0 = 20 Apr - 3 May, Lockdown 3.0 = 4 May - 7 May, Lockdown 4.0 = 18 May – 29 May, Unlock 1.0 = 30 May – 30 Jun, Unlock 2.0 = 1 Jul – 31 Jul; Unlock 3.0 = 1 Aug – till date (30 Aug)2. Index of Industrial Production (IIP) shows the growth rates in different industry groups (comprises of Mfg. (78% weightage), Mining (14%), Electricity (8%))3. Index of Core Industries (ICI) measures performance of production in 8 core industries (Coal, Crude, NG, Refinery Products, Fertilizers, Steel, Cement & Electricity)4. In view of the effect of the containment measures for COVID-19 pandemic, the indices for Apr-20 & May-20 are not comparable with preceding months5. Others include Naptha, Petcoke, Bitumen; ATF = Aviation Fuel; Petrol refers to MS and Diesel refers to HSD as reported by Petroleum Planning & Analysis Cell (PPAC)Source: Power System Operation Corporation, Ministry of Statistics & Programme Implementation, Dept. for Promotion of Industry & Internal Trade, PPAC, BCG analysis

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Stronger recovery in merchandize exports vs. imports; Relatively less impact on Services trade in April-June'20 vs. Merchandize

MERCHANDIZE &

SERVICES TRADE

2

Apr-20Jan-20

17.7

Feb-20 Mar-20 May-20

12.0

Jun-20

19.0

11.1

18.2

11.1

16.5

9.3

16.8

9.9

17.0

10.0

Services Exports Services Imports

May-20 Jun-20Apr-20Mar-20Jan-20 Feb-20 Jul-201

19.1

25.8

41.1

27.7

37.5

21.4

31.2

21.1

10.3

17.1

22.2 21.923.6

28.5

Merchandize Exports Merchandize Imports

7% 7% 1% -9% -8%Exports

YoY growth3% -35% -60% -36% -12%

Exports

YoY growth-2%-10% -10%

9% 13% -2% -18% -15%Imports

YoY growth2% -29% -60% -52% -48%

Imports

YoY growth-1%-20% -28%

1. July 2020 Merchandize Import & Export numbers are provisional as provided by the Ministry of Commerce and Industry as of 14-Aug Source: RBI, Ministry of Commerce & Industry, BCG analysis

Services Trade (USD Bn) Merchandize Trade (USD Bn)

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.

9385

10

55

82 87

120

60

0

30

90

110

Jan

-20

Fe

b-2

0

Ma

r-2

0

Ap

r-2

0

May-

20

Jun

-20

Jul-

20

-7%

+6%

20

40

50

60

10

0

30

2

243033

Ap

r-2

0

24

34

Fe

b-2

0

Jan

-20

Ma

r-2

0

6

8

16

17

16

Jun

-20

19

57

27

48

May-

20

23

Jul-

20

9

57

41

25

43

-15%

+11%

Intra-stateInter-state

12% -26% -84% 18%14%45% -23% -88% 437% 48%18%MoM

growth

YoY

growth-53%

111 106 103

6583

94

60

0

30

90

120

Jan

-20

Fe

b-2

0

Ma

r-2

0

Ap

r-20

May-

20

Jun

-20

15%

+13%

3% -14% -35% -21% -8%6%YoY

growth

Toll collection

suspended

from 25-Mar

to 20-Apr2

6% -7%

Recovery in rail freight, FASTag transaction volumes and E-Way bill volumes in June-July'20, however still lower than pre-COVID levels

LOGISTICS

3

1. E-Way bills are required to be generated at the time of transport of goods by every registered person if the value of the consignment exceeds INR 50,000; 2. As per announcement by NHAI; 3. High YoY growth due to drop in e-way bills in Jun-19; due to new provision introduced limiting generation of E-Way bills if the GST Return filing pending for last 2 monthsSource: GST Network, NHAI, NPCI, Ministry of Railways, CEIC data, BCG analysis

Railway freight traffic

originating (Mn Tons)

FASTag transaction

volume (Mn)E-way bills1 generated

(Mn)

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.

400

150

0

200

50

100

300

250

350

450

Jun

-20

275284

Ma

r-2

0

426

Jan

-20

Ap

r-2

0

417

344

Fe

b-2

0

410M

ay-

20

289

Jul-

20

-19%

164 162133

4076

107 123

112 106

77

5669

210

270

0

30

90

60

300

120

150

180

240

Jan

-20

Fe

b-2

0

95

Ma

r-2

0

268

Ap

r-2

0

19

May-

20

Jun

-20

Jul-

20

163

7

276

210

47

192

-30%

-37% -39% -29% -1% -32% -83% -68%-1%YoY

growthYoY

growth

Domestic International

-3% 1% -13% -20% -40% -34%

JNPT traffic and Air Freight improved in July'20 vs. previous months, however still far from pre-COVID levels

LOGISTICS

3

JNPT Container Traffic ('000s TEUs1) Air Freight (k Tons)

1. TEU refers to Twenty-foot equivalent unit equivalent to 20 shipping containers (20 feet long, 8 feet tall)Source: Jawaharlal Nehru Port Trust, Airport Authority of India, BCG analysis

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9.5 9.99.1 9.0 9.1 9.4

9.910.6 10.6

11.3 11.0 11.110.8 11.1

14010

15150

0

130

5

0

Bank deposits (INR Tn)

138

28

-Fe

b

139

132

YoY growth (%)

131

05-J

un

17-J

an

133

31-J

ul

31-J

an

19

-Ju

n

14

-Fe

b

133

133

13

-Ma

r

140

7.9

141

136

137

10-A

pr

137

24-A

pr

08-M

ay

138

27

-Ma

r

03-J

ul

140

17-J

ul

142

22-M

ay

YoY growth Aggregate bank deposits

7.26.4 6.1 6.1 6.1

7.26.8 6.5 6.3 6.2 6.2 6.3

5.8 5.5

10

5

15

99

0 0

102

100

17-J

an

101

103

31-J

an

101

14

-Fe

b

31-J

ul

103

101

13

-Ma

r

104

10-A

pr

100

103

24-A

pr

103

27-M

ar

08

-May

102

22

-May

28

-Fe

b

103

YoY growth (%)

103

102

19

-Ju

n

7.2

03-J

ul

102

17-J

ul

05

-Ju

n

YoY growth Aggregate bank credit

Lockdown Lockdown

Bank credit (INR Tn)

Aggregate deposits continue to remain stable while bank credit witnessed a dip in July'20

FINANCIAL SERVICES

4

Total deposits value & YoY growth

aggregated for all banks

Total credit outstanding value & YoY growth

aggregated for all banks

Source: RBI DBIE, Press search, BCG analysis

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Marginal change in non-food credit split across sectors & industries(As recorded for 41 banks that account for 90% of total non-food credit outstanding)

8.5% 7.3% 6.7% 7.3% 6.8%

Industry Jan-20 Jul-20

Infrastructure 36.8% 37.4%

Metals & Metal Products 11.9% 12.0%

Textiles 6.7% 6.7%

Chemical Products 6.5% 6.2%

All Engineering 5.6% 5.0%

Food Processing 5.3% 5.6%

Construction 3.7% 3.6%

Vehicles & Equipment 2.8% 3.1%

Petroleum, Coal & Fuels 2.0% 2.0%

Cement Products 2.0% 2.1%

Gems & Jewelry 2.1% 1.9%

Rubber & Plastic 1.7% 1.7%

Mining & Quarrying 1.5% 1.5%

Paper & Paper Products 1.1% 1.1%

Beverage & Tobacco 0.5% 0.5%

Wood & Wood Products 0.4% 0.5%

Leather & Leather Products 0.4% 0.4%

Glass & Glassware 0.3% 0.3%

Other Industries 8.4% 8.1%

Total 100% 100%

Non-Food Credit1 (INR Tn)

> Jan-20 <= Jan-20

YoY

growth

Decline in YoY growth rate2

31% 32%

13%

32% 32%

27%

28%

Jan-20

90

27%

32%

28%

Feb-20

28%

13%

28%

91

28%

Mar

13%

28%

May-20

27%

32%

Apr-20

27%

13%

28%

13%

90

28%

13% 13%

89

31%

28%

Jun-20 Jul-20

8992 91

28%

6.7% 6.7%

Agriculture and allied activities

Industry

Services

Personal loans

1. Non-food credit: All loans except those to Food Corporation of India and state agencies for procurement of grains under government PDS 2.Only includes data for 41 Scheduled Commercial Banks (SCBs), accounting for 90% of total non-food credit extended by all SCBsSource: RBI

FINANCIAL SERVICES

4

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July'20 retail transactions (volume & value) witnessed a slight uptick vs. previous months; Value of transactions remains below last year's levels

4

FINANCIAL SERVICES

Volume of retail transactions4 (in Bn) Value of retail transactions4 (in INR Tn)

Se

p-1

9

10% 10%

37%

9%

Fe

b-2

0

Jul-

19

15

10%

12

Ma

r-2

0

53% 50%

62%

12

Nov-

19

39%

40%

Au

g-1

9

10%

13

47%49%

56%41%

10%

46%

24%

43%

10%

Oct

-19

10% 10%

47%

48%43% 43%

De

c-1

9

65%47%

43%

Jan

-20

10%9%

10

52%

43%34%

13

27%

Ap

r-2

0

11%

14

May-

20

Jun

-20

9%

34%

57%

Jul’

20

1313

14 14

7

12

Digital3 (incl. UPI)Cash1 Physical2

19% 17% 16% 20% 19% 17% 19% 35% -4% -50% -29% -2%

9%

78%

2.1

4%

1.9

Ma

r-2

05% 3%

77%

Au

g-1

9

4%

Jul-

19

15%18% 17%

2.5

4%

79%

Se

p-1

9

Nov-

19

16%

4%

2.5

80%

3%

82%

Oct

-19

15%

2.4

81%82%

87%

De

c-1

9

14%

3%

Jun

-20

Jan

-20

14%

86%

3%

13%

82%

Fe

b-2

0

2.2

84%

1% 12%

90%

19%

2.6

1% 2%2%

May-

20

12% 11%A

pr-

20

Jul’

20

2.1

2.42.4

2.7

2.0

2.6

87%

60% 62% 54% 61% 56% 53% 59% 56% 24% 7% 22% 39%

1. Cash refers to NFS Inter Bank ATM Cash Withdrawal; 2. Physical refer to CTS Cheque Clearing (Processed Volume); 3. Digital refer to NACH- National Automated Clearing House, IMPS, RuPay Card usage at (POS), RuPay Card usage at (eCom) AEPS (Inter Bank) Txn over Micro ATM (e.g., Cash withdrawal/Cash Deposit), BBPS (Bill Payment passing through BBPCU), UPI—Unified Payments Interface, USSD 1.0, NETC 4. NPCI retail transactions does not include NEFT, RTGS through RBI, Credit and debit card transactions other than RuPay, mobile banking & internet banking transaction, cash withdrawal from bank's ATMSource: BCG Analysis, National Payment Corporation of India (NPCI)

YoY growth

37% -4%

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Value of UPI transactions in July'20 increased by 11% vs. June'20 & 98% vs. July'19 hitting an all time high

4

FINANCIAL SERVICES

Source: NPCI

0.0

3.6

1.8

2.7

0.9

1.47

Value of transactions in INR Tn

2.03

Jul-19 Aug-19

1.46

Dec-19Sep-19 Oct-19 Nov-19 Jan-20 Feb-20

1.89

Mar-20

2.16

May-20 Jun-20 Jul-20

2.23

Apr-20

1.91

2.18

Jun-19

1.55 1.61

2.06

1.51

2.62

2.91

+98%

+11%

1.251.331.311.311.221.150.960.920.820.76 1.00 1.501.23 1.34

YoY%

Volume of

Txn in Bn.

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All

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rved

.

Signs of recovery witnessed in cement production and finished steel consumption in May-July'20 period

5

SECTOR-WISE IMPACT

5% -21%YoY

growth

4.30

5

10

15

20

25

30

35

Ma

r-2

0

Jan

-20

30.731.4

24.8

Fe

b-2

0

Ap

r-2

0

22.4

May-

20

26.3

Jun

-20

-16%

Cement Production

8% -25% -85% -90% -15%

4.4 4.4 4.1

0.4

2.0

3.54.0

0

1

2

3

4

5

Fe

b-2

0

Jan

-20

Ap

r-2

0

Ma

r-2

0

May-

20

Jun

-20

Jul-

20

-9%

2% 7% -5%

Long Steel Consumption

Cement Production

(in MT)

Consumption of Long Steel

(in MMT)

-83% -43%

4.5 4.4

3.2

0.6

2.12.5

3.8

0

1

2

3

4

5

Jul-

20

Ma

r-2

0

Fe

b-2

0

Jan

-20

May-

20

Ap

r-2

0

Jun

-20

-16%

7% 2% -38%

Flat Steel Consumption

Consumption of Flat Steel

(in MMT)

-56% -51%-7% -12% -6%

Source: Joint Plant Committee, Ministry of Commerce and Industry, Livemint, CMIE, BCG Analysis

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Auto sales saw an improvement in July'20 vs. previous months, though still below last year's levels; tractor sales grew vs. July'19

5

SECTOR-WISE IMPACT

Note: Apr-20 figures for all categories based on CMIE; Accurate split between domestic sales & exports for Apr-20 not available; all sales considered under exports based on press search1. Tata Motors data is available for Apr-June only, BMW, Mercedes and Volvo Auto data is not available Source: SIAM, CMIE, Press search, BCG analysis

Passenger vehicles sales ('000 units) Two wheeler sales ('000 units)

Tractor Sales ('000 units) Three wheeler sales ('000 units)

68

292248 227 210 190

141 183

57

Mar-19

57

Apr-19

10659

May-19 Jul-201Jun-19 Jul-19

38

286

0

Mar-20

461 3415

May-20

25

179

Jun-20

35

360

266305

251

4 49130

218

Apr-20

1,4412,001

1,725 1,649 1,512867 1,013 1,281

Apr-19

251

Jun-19

1,085

Mar-19

401

2,402

297

Jun-20

293

May-19

1,947

307

Jul-19

1,462

218

Mar-20

0280

46

Apr-20

97

May-20

196 181

Jul-20

1,6922,018

46

1,818

377

1,209

5 4

62

6

Apr-19

8

57

Mar-19

58

May-19

82

76

6

65

Jun-19

46

86 6

Jul-19 Jun-20

93

31

Jul-20

4

Mar-20

12 1

Apr-20

60

May-20

63

7162 65

5235

12

99

71

49 46 40 40 40 26 18 26 20

6646 52 52 56

28

Apr-19

7

Mar-19

115

May-19 Jun-19 Mar-20Jul-19

0

Apr-20

2

May-20

3610

20

Jun-20

13

Jul-20

92 91 92 96

54

733

Domestic sales 2019 Exports 2019 Domestic sales 2020 Exports 2020

-50% -99% -51%-83%YoY growth -36% -98% -38%-81%YoY growth

-53% -92% -66%-78%YoY growth-50% 20%YoY growth -80% 1%

-14% -20%

-61%36%

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July'20 pharma sales growth stabilized while fertilizers continue to see high YoY growth; Limited signs of recovery in Chemical production index

5

SECTOR-WISE IMPACT

1. Indian Chemical Production Index refers to a 3-month moving average figure for chemicals production with figure for 2012 as base figure (100)Source: AIOCD, American Chemistry Council, Mobile Based Fertilizer Management System (mFMS), Ministry of Finance, PIB, The Economic Times, Press search, BCG analysis

Pharmaceutical Sales

(INR k Cr)

8% -9% 2%YoY

growth12% 9% -11%

Jun

-20

Ap

r-2

0

Jan

-20

Fe

b-2

0

Ma

r-2

0

May-

20

Jul-

20

12.1 12.1 11.8

10.2 10.311.2

12.1

Fertilizer Sales

(in LMT)

-17% -28%

120 121115

98

8478

Jan

-20

Fe

b-2

0

Ma

r-2

0

Jun

-20

May-

20

Ap

r-2

0

3% 3% -2%

Indian Chemical Production

Index1 (3mo. moving avg.)

-34%45% 98%11% 53% 18% 79% 34%

Ma

r-2

0

Ap

r-2

0

Jan

-20

Fe

b-2

0

May-

20

64

Jul-

20

Jun

-20

47

2921

40

69

92

0.2%

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.

19%

Life Insurance segment showed gradual recovery in premium in June-July'20; Non-Life segment registered ~18% YoY growth in July'20

5

Life Insurance premium observed gradual recovery in May-

June'20, slight decline seen in July'20

Non-Life1 Insurance relatively less impacted; premium

grew ~18% YoY in July'20

15,892

12,23112,948

14,370 14,477

10,891

13,961

17,011

Jul-19Apr-19 May-20May-19 Jun-20Jun-19 Apr-20 Jul-20

-9%

-11%

+8%

+18%

1. Non-Life Insurance includes Fire, Marine, Motor, Engineering, Health, Cop Insurance, Credit Guarantee, Aviation, Personnel accident and Miscellaneous Source: IRDAI, BCG Analysis

9,982

18,414

32,241

21,509

6,728

13,739

28,869

22,986

Jun-20May-20Apr-19 Jul-19May-19 Jun-19 Apr-20 Jul-20

-33%

-25%

-10%

+7%

Number of

policies

(‘000)

1283 1625 1900 416 1008 1681

YoY growth

rate for no.

of policies

-68% -38% -11%

Premium (INR Cr.)

2193 1808

-18%

SECTOR-WISE IMPACT

Premium (INR Cr.)

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India’s fiscal deficit reached INR 8.21 Tn (103% of budget estimate)1 in April-July'20; GST collections dipped 15% in July'20 vs. last year

Central Govt. Revenue & Expenditure (INR Tn)(based on data from Controller General of Accounts, Ministry of Finance)

Total GST Collections3 (INR Tn)(based on data from GST Council)

8% 8% -72% -38% -9%-8%

Expenditure

YoY growth

1. Business Standard 2. Gross Fiscal Deficit is the difference between the total Non-Debt Receipts of the government (revenue receipts and non-debt capital receipts) and Total expenditure 3. GST Collections include all components: CGST, SGST, IGST, CessSource: Ministry of Finance, GST Council, BCG analysis

7

1

0

5

2

-2

3

-1

6

4 0

8

1

9

2

10 3

0.3

Exp

en

dit

ure

& R

ece

ipts

(IN

R T

n)

3.1

2.0

Gro

ss Fisca

l De

ficit (INR

Tn

)

0.5

1.0

0.2

Jan-20

0.5

Feb-20

-1.0

Mar-20

2.8

Apr-20 May-20

2.2

1.91.6

Jul-20

3.2

1.61.1

Jun-20

1.52.0

3.02.4

0.8

2.0

Total Expenditure Non-Debt Receipts Gross Fiscal Deficit2

0.7

0.9

0.2

0.0

1.0

0.4

1.1

0.1

0.3

0.5

0.6

0.8

1.2

Apr-20

To

tal

GS

T C

oll

ect

ion

s (I

NR

Tn

)

0.32

0.87

Mar-20Feb-20Jan-20 May-20

1.05

Jun-20 Jul-20

1.11

0.98

0.62

0.91

-71%

-21%

Revenue

YoY growth

-15%

-6% 80% 21% -21%5%

5% -2% -72% -64%37%

46%

-24%

6%

-28%

6MACROECONOMIC

INDICATORS

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53% MoM growth in count of tenders announced by state & central govts in July'20; 300+% recovery in tender count in Jul'20 from Apr'20 levels

Au

g-1

9

Jul-

20

Sep

-19

2.0

Oct

-19

No

v-1

9

De

c-1

9

3.3

Jan

-20

Ma

r-2

0

2.7

Ap

r-2

0

May-

20

Jun

-20

2.11.8 1.7

Jul-

19

Fe

b-2

0

1.8 1.71.5

2.82.5

1.8

0.8

-57%

+53%

Source: Project Today database, BCG analysis

Count of tenders announced by central &

state govts (k)

Value of tenders announced by central & state

govts (INR Tn)

Jul-

19

Sep

-19

De

c-1

9

No

v-1

9

Fe

b-2

0

Ma

r-2

0

May-

20

Jun

-20

Jul-

20

0.36

0.57

Jan

-20

0.48

Oct

-19

Ap

r-2

0

Au

g-1

9

0.31

0.46

0.57 0.60 0.58

0.740.65

0.550.60

0.50

+30%

-5%

Minimal drop in project value in

Apr-20 due to high ticket irrigation

projects in Telangana

6

YoY

growth17%-10% 7%-4%-5% 29%

YoY

growth54%-53% 244%-49%-42% 123%125% 55%

+313%

MACROECONOMIC

INDICATORS

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MGNREGA1 work demand & employment still at 70-80% higher levels than last year; slight dip observed compared to June'20

6

Job demand under the scheme has jumped sharply after lakhs of workers returned to their villages due to the crisis

0

30

20

10

40

1916

Jan-20 Feb-20

16

Mar-20

11

Apr-20

33

May-20

39

Jun-20

28

Jul-20

80%YoY

Growth-13% 56%-35%-1%5%

Work Demand

(households, in Mn)

Employment Provided

(households, in Mn)

0

10

20

30

40

50

Mar-20Feb-20

19

Jan-20

22 2113

Apr-20

36

May-20

44

Jun-20

32

Jul-20

71%YoY

Growth -11% 45%-40%2%5% 73%

83%

1. Mahatma Gandhi National Rural Employment Guarantee Act; 2. Based on press searchSource: Ministry of Labor & Employment, Ministry of Rural Development, The Indian Express, Outlook India, LiveMint, BCG analysis

MACROECONOMIC

INDICATORS

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Organized sector hiring and joining activity improved in June-July'20 (based on select indicators)

ECONOMIC

MACROECONOMIC

INDICATORS

6

1. Jan-20 level considered as pre-COVID-19 level 2. Active members refers to total contributing members during last one year as published on EPFO dashboard as on 24-Jul-20; 3. Covers every establishment in which 20+ people are employed and certain organizations are covered, subject to certain conditions and exemptions even if they employ less than 20 persons eachSource: Ministry of Labor and Employment, InfoEdge, Naukri.com, BCG analysis

Naukri Jobspeak Index observed gradual uptick in

July'20 with MoM growth of ~4%

Net New EPF Subscriber Trend

Net new EPF subscribers are net of the members newly enrolled, exited and rejoined

during the month as per records of the EPFO

Employees in an establishment3 drawing less than INR 15,000 per month have to

mandatorily become members of the EPF upon joining

Net new EPF subscribers improved to ~0.66 Mn

in June'20 vs. previous months

Naukri Jobspeak Index

Monthly index which calculates and records hiring activity based on newly added job

listings on Naukri.com every month

Jobs analyzed for the monthly index are qualified on the basis of white-collar jobs

belonging to the organized corporate sector

95100 101

82

38

51 53

0

25

50

75

100

125

Jan-19 Jul-19Mar-19 May-19 Jan-20Sep-19 Nov-19 Mar-20 May-20 Jul-20

40

Naukri Jobspeak Index

10

0

Jan-201 number

taken as base

for index (100)

Net new EPF Subscriber (in Mn)

0.83 0.79 0.81

0.500.31

0.62

1.00 1.02

0.57

0.02 0.17

0.66

0.0

0.5

1.0

1.5

JunMayJan Feb Mar Apr

2020

2019

~58.1 Mn active members on

EPFO in last 12 months2

Avg. monthly net additions for

CY 2019 at ~0.64 Mn

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Contraction in WPI to sub-zero levels in June-July, slight recovery in July'20; CPI also fluctuating due to falling food prices & low demand

6

1. The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated as year on year increase in prices of the commodities 2. The wholesale price index (WPI) measures and tracks the changes in the price of goods in the stages before the retail level –that is, goods that are sold in bulk and traded between entities or businesses instead of consumers. It is calculated as year on year increase in prices of the commoditiesNote: In May 2016, the Reserve Bank of India (RBI) Act, 1934 was amended to provide a statutory basis for the implementation of the flexible inflation targeting framework. Source: BCG Analysis. DPIIT, MOSPI, Office of the Economic Advisor - Department for Promotion of Industry and Internal Trade,CMIE

Monthly inflation rate (in %)

4.8

5.75.3

4.65.2

5.5

4.5

3.52.8

2.9

3.1

3.2

2.8

2.0

1.21.2

0.30.0

2.8

3.55

0

-5

10

Ma

y-18

Jun

-20

Jul-

19

Sep

-19

Ap

r-18

-1.8

3.6

Jun

-18

Au

g-1

8

-3.4

Sep

-18

Oct

-18

No

v-18

Ma

r-20

Dec-

18

Ma

y-19

Ap

r-20

Feb

-19

Oct

-19

Ma

r-19

Ap

r-19

-0.6

Jun

-19

0.6

No

v-19

Dec-

19

Jan

-20

2.3

Feb

-20

0.4

-1.6

Jul-

20

Ma

y-20

Au

g-1

9

Jul-

18

Jan

-19

Wholesale Price Index (WPI)2 Consumer Price Index (CPI)1

4.94.9

3.73.73.4

2.0

2.62.9

3.0

3.0

3.2

3.1

7.47.6

7.2

6.3

6.9

6

0

8

2

4

Dec-

19

4.6

Jan

-20

Oct

-18

Feb

-20

Ma

r-19

Jan

-19

4.6

Au

g-1

9

Ap

r-18

Ma

y-18

Sep

-18

Jun

-18

4.2

6.6

Jul-

18

Oct

-19

Jul-

19

Au

g-1

8

2.3

No

v-18

2.1

Dec-

18

Feb

-19

No

v-19

Ap

r-19

Ma

y-19

Jun

-19

3.3

4.0

Sep

-19

5.55.8

Ma

r-20

Ap

r-20

Ma

y-20

Jun

-20

6.2

Jul-

20

MACROECONOMIC

INDICATORS

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RBI retained policy rates in July'20 at the same level, while MCLR on bank borrowings recorded slight decline

1. MCLR: Minimum interest rate at which scheduled commercial banks can lend to customers (based on incremental cost of funds). Marginal Cost of Funds based Lending Rate was introduced from April 2016 for fixing interest rates, and replaced the former Base rate methodology (based on average cost of funds). 2. Base Rate: Minimum rate set by the Reserve Bank of India below which banks are not allowed to lend to its customers 3. Repo Rate: Interest rate at which the RBI lends short term funds to licensed commercial banks 4. Reverse Repo Rate: Interest rate which the RBI borrows money from commercial banksSource: CMIE, RBI DBIE

Reserve bank’s policy rates (%) MCLR1 of scheduled commercial banks (Median rate on one year borrowings, in %)

10

6

Oct-19Jul-19 Jan-20

8

Apr-20Jan-19 Jul-200

Apr-19Oct-18Jul-18Apr-18

Policy rate %

8.53

4.00

3.35

Base rate 2 Reverse Repo rate4Repo rate3

Jan-19

8

Apr-19 Jul-19Apr-18 Oct-19 Jan-20 Apr-20 Jul-200

Oct-18Jul-18

9

10

7.53

7.57

8.82

MCLR (%)

6.84

Total Private Sector Banks

Public Sector Banks Foreign Banks

6

Data as of 31 Aug

MACROECONOMIC

INDICATORS

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Indian Rupee remained rangebound at ~INR 75/dollar; Forex reserves continue to hit record high levels, at $523 billion in the last week of July'20

Source: CMIE, RBI

475 476 480 479 481 485 487 490 493 502 508 506 507 513 516 518 523

0

100

200

300

400

500

600

1-M

ay-

20

3-J

ul-

20

10

-Ap

r-20

Forex reserves (US$ Billion)

3-A

pr-

20

17

-Ap

r-20

8-M

ay-

20

15-M

ay-

20

24

-Ap

r-20

22-M

ay-

20

29-M

ay-

20

5-J

un

-20

12-J

un

-20

19-J

un

-20

26-J

un

-20

10-J

ul-

20

17-J

ul-

20

24-J

ul-

20

5-J

ul-

20

17-M

ay-

20

24-M

ay-

20

76.0

12-J

ul-

20

19-J

ul-

20

2-A

ug-2

0

31-M

ay-

20

7-J

un

-20

76.5

26-J

ul-

20

3-M

ay-

20

0.0

75.0

75.5

77.0

28-J

un

-20

21-J

un

-20

29

-Ma

r-20

12-A

pr-

20

5-A

pr-

20

19-A

pr-

20

26-A

pr-

20

10-M

ay-

20

14-J

un

-20

74.68

Exchange Rate (INR/USD)

75.29

74.68

75.09

75.39

Exchange rate as on 4th Aug'20

Exchange Rate (INR/USD) Forex reserves (US$ Billion)

MACROECONOMIC

INDICATORS

6

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While Manufacturing PMI contracted in July'20, Services PMI witnessed a marginal uptick; Sentiment still below 50 point mark

SENTIMENT –

MFG. & SERVICES PMI

7

Note: The Purchasing Managers Index (PMI) is a measure of the prevailing direction of economic trends in manufacturing and services sectors. The PMI is based on a monthly survey of supply chain managers across 19 industries, covering both upstream and downstream activity. Value >50 indicates possible expansion in the sector, and value <50 indicates recession.Source: IHS Markit, CMIE, Analyst Reports, BCG analysis

Manufacturing PMI contracted from 47.2

in June'20 to 46 in July'20

Services PMI witnessed a marginal uptick from 33.7

in June'20 to 34.2 in July'20

Manufacturing PMI Services PMI

Possible expansion

in the sector

Possible contraction in the sector

53.857.5

33.7

34.2

0

5

10

15

20

25

30

35

40

45

50

55

60

Ap

r-20

Ap

r-19

Jul-

19

Oct

-19

Jan

-20

Jun

-19

Jul-

20

Sep

-19

Jun

-20

No

v-19

Ma

r-20

Ma

y-20

Ma

y-19

Dec-

19

Au

g-1

9

Feb

-20

5.4

49.350

12.6

-41%

Decline in Services PMI

from the 7-year peak in

Feb-20 owing to impact on

global demand; dropped

below 50-mark

Sharp recovery in Jun-20

52.555.3

47.2

46.0

0

5

10

15

20

25

30

35

40

45

50

55

60

Ap

r-19

Jun

-19

Ma

y-19

Jul-

19

No

v-19

Jul-

20

Jan

-20

Dec-

19

Feb

-20

Ma

r-20

Sep

-19

Ap

r-20

Au

g-1

9

Ma

y-20

Jun

-20

Oct

-19

50

27.430.8

-17%

Possible expansion

in the sector

Possible contraction in the sector

Decline in Mfg. PMI from

the peak in Jan-20 owing to

drop in exports, supply

chain disruptions due to

COVID-19; Has shown

sharp recovery since

easing of restrictions

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Sentiment of rural & urban consumers remained stable in July'20SENTIMENT-

CONSUMER

SENTIMENT

7

Source: CMIE Consumer Pyramids Survey, BCG analysis

CMIE Consumer Sentiment Survey Rural Consumer Sentiment Index

103 103 102 100

54 52 50 43 44 47 43 44 45 41 45 43 45 43 4149 48 43 46

150

100

0

50

01-M

ar

07-J

un

08-M

ar

12-A

pr

22-M

ar

24-M

ay

15-M

ar

29-M

ar

05-A

pr

19-A

pr

31-M

ay

26-A

pr

26-J

ul

03-M

ay

10-M

ay

17-M

ay

14-J

un

21-J

un

28-J

un

05-J

ul

12-J

ul

19-J

ul

02-A

ug

103 101 101 95

4839 41 42 40 35 35 35 35 35 38 38 37 41 43 44 41 40 39

100

0

50

150

10-M

ay

1-M

ar

12-A

pr

14-J

un

15-M

ar

8-M

ar

22-M

ar

24-M

ay

29-M

ar

5-A

pr

19-A

pr

5-J

ul

26-A

pr

3-M

ay

19-J

ul

17-M

ay

31-M

ay

7-J

un

21-J

un

28-J

un

12-J

ul

26-J

ul

02-A

ug

Sample Size• 1.74L households in 90 cities and 969

villages surveyed over 4 months

Methodology• Longitudinal survey: Same set of

households surveyed in batches over

time

• Scoring based on 5 questions:– Perception of current well-being

– Expectations of future well-being

– Perceptions of current economic

conditions of the country

– Perceptions of prospective

economic conditions of the

country

– Household's propensity to spend

on consumer durables

Urban Consumer Sentiment Index

Data as of 31 Aug

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Pharma continues its positive trajectory in the Indian stock market while realty, media and bank Nifty see the maximum decline

SENTIMENT – NIFTY

SECTORAL INDICES

7

Sectoral Index Change (%)

Pharma 39.12%

IT 10.99%

Energy 6.12%

FMCG 2.24%

Infra -0.06%

NIFTY -5.05%

Commodities -5.14%

Auto -7.62%

Metal -13.43%

Services -13.58%

Financial Services -22.02%

Media -26.81%

Bank Nifty -27.43%

Realty -34.10%

1. Growth rate vs. 01-Feb-20Source : NSE, Bloomberg, BCG analysis

Nifty Sectoral Indices

Descending order of performance1

10

20

-20

-50

-10

-40

0

-30

30

40

Change (%)

18-J

un

01-F

eb

19-F

eb

11-M

ar

30-M

ar

22

-Ap

r

12-M

ay

01-J

un

10-J

ul

27-J

ul

Data as of 31 Aug

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Increased volatility and trading volumes in leading stock exchanges; Recovery in mutual fund AUM at 11% YoY in July'20

SENTIMENT – STOCK

MKT. TRANSACTIONS

7

1. Volatility Index is a measure of market’s expectation of volatility over the near term; India VIX is a volatility index based on the NIFTY50 Index Option prices providing the expected market volatility over the next 30 calendar days – figures represented are as of end of every month shown2. Mutual funds Assets Under Management (AUM) represented as recorded at end of every month shownSource: BSE, NSE, AMFI, BCG analysis

Stock Market Transactions (INR k Cr)

19% 18% -3% -5% 5%-6%

15

5

0

10

20

30

25

Jul-20Jan-20

27.1

Feb-20 Mar-20 Apr-20 May-20 Jun-20

27.9 27.2

22.323.9 24.5

25.5

Mutual Funds AUM include investments from individuals (50.5%) & institutions

(49.5%); institutions include domestic & foreign institutions and banks

11%

Mutual Funds AUM2 (INR L Cr)

17

64

30

2925

0

20

40

60

80

500

1,000

0

1,500

805906

Tra

nsa

ctio

n V

alu

e (

IN

R)

k C

r

56

Ind

ia V

ola

tility Ind

ex (V

IX)1

Jan-20

56

Jun-20

797

23

Feb-20

82

Apr-20

1,006

Mar-20

44

34

65

1,000

May-20

110

1,351

80

1,349

Jul-20

BSE

NSE

India VIX

10% -20% 21% 12% 135%1%BSE YoY

21% 44% 42% 27% 127%25%NSE YoY

66%

89%

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Foreign equity inflows observed fluctuations amidst current uncertain situations

SENTIMENT - FOREIGN

EQUITY INFLOW

7

Source: Bloomberg, Press search, BCG analysis

1,373

-612

1,396

-948

2,262

1,044

-350

450

-211

-1,000

0

1,000

2,000

3,000

01-J

an

01-A

pr

01

-Fe

b

01

-Ma

r

01

-May

01

-Ju

n

01

-Ju

l

Net Foreign Equity Inflows $Mn

20192020

1st COVID-19 case

in India

Surge in COVID-19

cases in India as well

as globally

India

Lockdown

Global COVID-19 growth

slowing down since early

April

New FDI rules

announced

Aggressive lifting

of the lockdown

Equity mutual funds

witnessed the lowest net

inflows in 51 months in June

Data as of 31 Aug

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PE/VC investments saw an improvement in July'20 vs. last 3-4 monthsSENTIMENT -

PE/VC INVESTMENT

7

Note: 1. Deals include Angel/Seed, Venture Capital and Private Equity deals which are announced & closed between 01-Jan- 2020 and 31-Aug-2020; 2. Others includes Media & Entertainment, Retail, Shipping & Logistics, Sports & Fitness, Textiles & Garments, Travel & Transport, FMCG, Advertising, othersSource: Venture Intelligence, BCG analysis

Total deal value of PE/VC investments1 ($ Bn)

(Excluding Jio Platforms deals)

37%

11%

Jan-20 Feb-20

3%

0%1%

6%

39%

18%

10%

5%

35%16%

5%

0%

6%

12%

11%

9%

8% 2%

11%

44%

Jul-20

1%

14%

70%

45%

0%

40%

Mar-20

2%1%

19%

Jun-20Apr-20

2%

38%

18%

May-20

5%

9%

23%

4%

42%

1%13%

4%

32%

3%

2.73

1.66

1.021.08

0.941.14

1.78

24%

Others2

BFSI

Telecom

Education

Manufacturing

Energy

Healthcare &

Lifesciences

IT & ITES

# of deals 65 53 55 58 35 45 46

Avg. deal value

($ Mn)42 31 19 19 27 25 39

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Indian GDP growth forecasts continuously being revised downwards over the last few months amidst uncertainty around economic recovery

5.2 5.1 5.2 5.83.5

0.83.5

1.5

DBSFitch

Ratings

Barclays Crisil

-1.7-4.3

-1.7-4.3

6.0 5.5 5.83.32.1 3.6

1.9 1.6

Goldman

Sachs

Economic

Intelligence

unit

India

Ratings

IMF

-3.9 -1.9 -3.9-1.7

May Jun

1. Pre-lockdown forecasts were made during Feb-2020/early Mar-2020; 2. Post-lockdown forecasts refer to forecasts made between 25-Mar to 22-Jul-20203. Pre-lockdown forecast for SBI is as of 16-Apr-2020Source: Analysts reports, BCG analysis

India GDP growth forecast for FY21 (YoY, %)Mar-Apr

4.7 3.35.8 5.5

-5.0 -5.0

1.0

Moody’s

Investor

Service

ICRA

0.0

Goldman

Sachs

DBS

-9.7 -8.3-4.8 -5.5

1.15.1 5.2 4.5

-6.8-5.0 -5.0 -6.0

S&PSBI3 Fitch

Ratings

Deutsche

Bank

-7.9-10.1 -10.2 -10.5

5.5 5.2 5.8

-4.0 -3.2 -4.5

Moody’s IMFBarclays

-9.5 -8.4 -10.3

4.1 5.5

-2.0-5.3

India

Ratings

Bank of

America

-6.1 -10.8

Pre-lockdown forecasts1

Post-lockdown forecasts2

1.7 - 4.3 pp drop 4.8 – 10.5 pp drop 6.1 – 10.8 pp drop

Jul

10.0 – 14.2 pp drop

Data as of 1 Sep; Estimates likely to be revised further

4.1 4.7 5.5

-6.0-9.5

-4.5

Bank of

America

ICRA FICCI

-10.1 -14.2 -10.0

5.8 5.7

-6.0 -6.1

DBS Nomura

-11.8 -11.8

NON - EXHAUSTIVE

Aug-Sep

5.2

1.1

5.7

-6.0

-10.9 -10.8

Barclays SBI3 Nomura

-11.2-12.0

-16.5

11.2 – 16.5 pp drop

GDP FORECASTS

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