Downgrading of India’s credit rating and outlook by Moody’s

Yesterday, credit rating agency Moody’s downgraded the Indian government’s local & foreign currency long-term issuer ratings to Baa3 from Baa2, while maintaining the outlook of the economy as “Negative”. This is the first time in 22 years that India’s sovereign credit rating has been downgraded. Moody’s further estimated that the GDP for the current fiscal is likely to shrink by 4% – the first full contraction in more than four decades. India’s local currency senior unsecured rating too has been downgraded from Baa2 to Baa3 while it’s short term local currency rating has been lowered to P-3 from P-2. Baa3 is the lowest investment grade – only a level above “junk” grade.

Back in November 2017, Moody’s had upgraded India’s rating to Baa2 with a “Stable” outlook. Last year in November, Moody’s had changed the outlook to “Negative” while maintaining the Baa2 rating. But now, the credit rating agency has also downgraded the rating to the lowest level of investment ratings. It brings Moody’s rating at par with those of the other two major credit rating agencies: S & P and Fitch which both rate at India at BBB(-) and project the economy to shrink by 5% in the current fiscal period.

Key reasons for this downgrade in ratings:

Moody’s has categoricaly stated that the downgrade in ratings is not an outcome of the blow of the covid19 induced lockdown but rather in context of the same. In Nov’17, when Moody’s had upgraded India’s rating to Baa2 with a “Stable” outlook, the same was on the expectation that “effective implementation of key reforms would strengthen the sovereign’s ‘credit profile’ through a gradual but persistent improvement in economic, instituitonal and fiscal strength”. However, the expectations set more than two years ago have not been met with slow implementation of said reforms resulting in the downgrading of the rating. Additionally, the other factors that have played a role in this action include:

  • Relatively low economic growth for a prolonged period of time
  • Signficant weakening in fiscal positions of both central and state governments
  • Growing stress in India’s financial sector

The Indian economy was already showing signs of a slowdown even before the covid19 pandemic hit. Gross Fixed Capital Formation (GFCF), an indicator of investment actvity, is projected to contract by 2.8% in FY19-20 as compared to growth of 9.8% in FY18-19. Growth in manufacturing and construction – two of the most people intensive sectors – stand at 0 and 1.3% in FY19-20 vis-a-vis growth of 5.7% and 6.1% in the previous FY. Private consumption slowed down to 5.3% from 7.2% a year before. Undoubtedly, al these had an impact on Moody’s assessment and decision.

In it’s official statement, Moody’s has stated that slow reform momentum and constrained policy effectiveness have contributed to a prolonged period of slow growth (vis-a-vis expectations and India’s potential) that started before the onset of the covid19 pandemic and one which the agency expects to continue even after the pandemic recedes. India is currently witnessing the sharpest contraction in it’s GDP growth – the provisional figure for FY19-20 stands at 4.2%, the lowest in a decade – with the prospect of this number getting further downward revised. The government finances – both center and state – are also in unhealthy state. Even before the onset of the pandemic, Moddy’s estimates that India’s general government debt burden (central + state) stood at 72% of GDP in the FY18-19 – 30 p.c. points higher than the Baa median. This already high number is further expected to rise to approx 84% in FY19-20 as government borrowing has continued to increase.

What are the implications of this action?

The credit rating is an indicator of the state of health of the economy and also the state of the government finances. A rating downgrade implies that bonds issued by the government become more risky because weak growth and deteriorating fiscal health undermines a goverment’s ability to payback. In other words, it will become more expensive for both the goverment as well as Indian corporates to raise loans since India will now be viewed as a riskier investment destination.

On the other hand, a negative outlook reflects dominant, mutually-reinforcing, downside risks from deeper stresses in the economy and financial system that could lead to a more severe and prolonged erosion in fiscal strength than Moody’s currenrly projects. In other words, a “negative” rating means that India’s credit rating could be downgraded further.

COVID 19 Spread : Status Update India as of May 30th

There are over 6.17 million cases of COVID-19 in the world today with over 342,727 deaths. In India there has been 181775 ( covid19india.org) cases till now with 5185 deaths. Here is a summary of the situation in India.

ALL INDIA LEVEL

Data Source: covid19india.org

There are over 50352 new cases in the week of 23rd to 30th May with 35 states and Union territories impacted all across the country. The weekly growth rate remained same as compared to last week. There has been a 38% increase in the total number of cases in the week. During this week there has been a 34% increase in the total number of deaths from 3868 in the week ending on 16th May to 5165 in the week ending on 23rd May.

Data Source: covid19india.org

STATE LEVEL ANALYSIS

Data Source : covid19india.org

Maharashtra, Tamil Nadu and Delhi are the top three states and UTs in terms of the spread of COVID-19 cases. The three states together account for over 58% of all the cases in the country. Maharashtra alone contributes to 36% of all the cases in the country. Gujarat and Rajasthan are the other two states in the top 5. Five states and UTs show no new cases this week. This week there has been over 3144 cases which were not assigned to any state by the Ministry of Health and Family Welfare.

Data Source : covid19india.org

Maharashtra, Telangana and Delhi has the highest number of positive cases per 100 tests conducted while there are 16 states with less than 1% positive cases out of the total number of tests conducted in those states. There are 6 states which have higher percentage of positive cases per 100 states than the national average of 4.5%. Maharashtra and Telangana has seen a significant increase in percentage of positive cases per 100 test this week as compared to the previous week. This has lead to the rise in national rate.

Data Source : covid19india.org

Odisha, Chhattisgarh, Tamilnadu, Bihar and Kerala has been the leading states in terms of recovery rate. West Bangal has the lowest recovery rate among all the states and UTs. Maharashtra and Gujarat, which are among the top states in terms of the total number of cases, has low recovery rates and are the bottom four states in terms of recovery rate. One silver lining is that all these three states have shown some improvement in recovery rate as compared to last week. West Bengal is the only state in India where the recovery rate is less than the world average. All other states have recovery rate more than 88%, which is the world average.

CITY LEVEL Analysis

Data Source: covid19india.org

Based on the spread of COVID 19 and also the weekly growth rate, IPD groups the top 20 cities in terms of COVID 19 cased into 4 risk groups. The highest risk group has 5 cities of which three are from Maharashtra. Mumbai and Delhi both fall in this risk group. This risk group contributes to 48% of all the COVID cases in the country. A special task group needs to be created for each pf these 5 cities falling in the highest risk group.

Data Source: covid19india.org

Almost 60% of all the cases in the country comes from 10 cities in the country. Another 6.5% comes from the next 10 cities. So only 20 cities put together contribute to over 66% of all the cases in the country. Mumbai, the financial capital of the country alone accounts for over 21% of the total number of cases in the country. In the top 10 cities there are three cities from Maharashtra ( Mumbai, Pune and Thane), two cities from Gujarat (Ahmadabad and Surat) and one city each from Rajasthan ( Jaipur) Madhya Pradesh (Indore), West Bengal (Kolkata) and Tamil Nadu (Chennai) respectively. The national capital region of Delhi also falls in the top 10 cities.

Data Source: covid19india.org

A Perspective on Indian Economy

The Ministry of Statistics & Programme Implementation , Government of India announced the GDP growth numbers for 2019-20 financial year.

Source: Ministry of Statistics & Programme Implementation, Government of India

It can be seen that there has been a constant drop in the growth rate from 2016-17 onwards. The GDP growth rate of 2019-20 is the lowest in 11 years. It should be noted here that the impact of the lockdown due to COVID-19 was effective for only 7 days in FY 2019-20. Hence this drop in growth numbers cannot be only due to the lock down. It can be said that Indian Economy is showing a symptom of declining growth for almost 5 years now. Let us diagnose what are the reasons behind this symptom.

DIAGNOSIS

The major component of GDP are the Private Consumption expenditure (a measure for demand) and gross capital formation (a measure for investment). Together they constitute over 87% of the economy. What has been the trend in terms of demand and investment?

Source: Ministry of Statistics & Programme Implementation, Government of India

There has been a steady decline in growth rate of demand from 2016-17 onwards. From over 8% in 2015-16, the growth rate of demand has fallen to 5.3% in FY 19-20. The export demand also showed a sharp fall in FY 2019-20. This year there has been a sharp fall in investment growth and we witnessed a shrinking of investment. Now what explains the fall in growth of both demand and investment.

What will be the factors determining a decline in growth of demand?

  • One, the people are holding onto their money and not spending it. In this case there will be a rise in savings.
  • Two, there can be a decline in growth of personal income leading to a decline in growth of spending.
Source: Ministry of Statistics & Programme Implementation, Government of India

One of the measures of savings is the growth rate of bank deposits. It is seen that there has been a decline in the growth rate of bank deposits in FY 19-20. So with savings growth also falling along with the decline in demand growth, in all likelihood there might be a decline in growth of personal income.

What will be the factors determining the fall in growth of investment?

Investment growth can be impacted by the decline in growth of demand. Lower growth in demand will mean lower profit for the companies and lower investment. Since the Indian economy has been witnessing a decline in demand growth, this can be in all probability be the reason behind declining growth in investment. Successive governments in India have adopted investment friendly policies. Moreover the government reduced the corporate tax in 2nd quarter, FY 2019-20 in order to boost up investment. In spite of these investment friendly policies there has been a decline in the investment growth in recent past.

Lower investment leads to slow growth in industrial and services sector. Almost all of the non agricultural sector has witnessed a decline in growth rate in FY 19-20. It should be noted here that manufacturing and construction, the two most people intensive sectors apart from agriculture, witnessed the lowest growth among all sectors. This has a detrimental impact on employment scenario. As per the Annual PLFS data released by the Ministry of Statistics & programme Implementation, the country witnessed the highest unemployment rate in 45 years. This lower investment makes the problem of unemployment more severe.

Source: Ministry of Statistics & Programme Implementation, Government of India

Thus it can be said that both the decline in growth of demand and investment are very much linked to each other and one is leading to the other. This is more alarming given it is a vicious circle.

As is shown, lower demand growth leads to lower profit and hence lower investments. Now lower investments will mean a decline in growth of industrial and services sector leading to lack of jobs in the economy which further leads to lower demand. So a holistic view needs to be taken given this linkage between the lack of growth of demand and that of investment.

PRESCRIPTION

The diagnosis of the problem of steady decline in GDP growth for 5 years suggests that this is due to both the lower growth in demand and investment that Indian economy is witnessing. The question is what will be the most apt prescription to arrest this decline in GDP growth.

There can be three possible ways to address this issue. First, to focus on boosting demand in the economy, second, to focus on boosting investment in the economy and third to focus on both.

As has been mentioned above, the government has adopted host of investment friendly polices targeting specific sectors. A reduction in corporate tax rates were also announced in the middle of 2nd quarter of FY19-20. So the focus has been to boost investment. Moreover host of policies were taken to make banking credit available for industries. But there has been a decline in growth of bank credits also despite host of credit friendly measures.

Source: Ministry of Statistics & Programme Implementation, Government of India

The quarterly trends in investment growth in FY 19-20 suggests that these measures did not lead to a boost up in investment. The investment growth has shown a steady decline across the four quarters of FY-19-20.

Source: Ministry of Statistics & Programme Implementation, Government of India

Now as part of economic package to boost the economy given the pandemic induced lock down, host of credit measures have been taken. But as we see, credit measures or other investment friendly measures are not able to boost the economy. The reason lies in the flow explained in the diagnosis section. Investment cannot boost up unless there is sufficient demand in the economy.

The optimal way to address this issue will be to take host of measures that boost both demand and investment.

  • Universal basic income or some income guarantee policies will ensure that people will have more have more cash in hand and hence they will spend more leading to more profit for industries. This will bring in investment.
  • Along with this, host of infrastructural projects need to be undertaken. This will lead to more investments.

The combination of the above two measures will help break the vicious circle and will be able to address the steady decline in growth rate. However both these measures will mean a rise in government expenditure. The fiscal deficit in FY 19-20 has been 4.6%, higher than the budgeted target. The government needs to rationalize its spending and focus on measures to boost the demand along with boosting the investment. A balance needs to be maintained so that on one hand the fiscal deficit does not rise at an uncontrollable level and on the other hand measures are adopted to help the economy move out of the vicious circle.

A Quick Glance into Q4 Performance of Indian Economy

The government of India is expected to publish the GDP growth rate estimates for Q4, FY 19-20 tomorrow. The revised estimates for the overall FY 2019-20 growth which was released in Jan, 2020 showed a 5% growth for the financial year. The Q3 growth stood at 4.7%. The world is going through a severe pandemic situation. The country has been under a lock down since March 25. So officially only 7 days of the 4th quarter went into lockdown. But the impact of global pandemic was visible in other countries since January. What is the impact of all these on Indian Economy. Let us examine how has been the trends in major economic indicators.

IIP and Core Sector Growth

Source: Ministry of Statistics and Programme Implementation, Government of India

The first two months of the quarter witnessed a positive growth in IIP after months. Moreover the IIP growth of February was higher than that in the same month last year. But March numbers were historically low. The IIP numbers of March stood at -16%. Because of this the overall IIP numbers sttod at -5% for the quarter. Similar pattern was witnessed for the core sector growth. While January and February numbers showed positive growths, in March the growth rate of core sectors stood around -6%. But still due to the positive growth in the previous two months, the overall quarter growth rate was positive for the first time after two months.

Sectoral Credit Growth

Source: Reserve Bank of India

The sectoral credit growth on various commercial sector is a reflection of the private investment growth or gross capital formation of the economy. The Indian economy had witnessed a negative growth in gross capital formation in Q3. The trend in Q4 continues to show a dismal picture with the only silver lining coming from services sector.

In terms of sectoral credit growth as reported by Reserve Bank of India, it is seen that almost all the sectors have witnessed a lower credit growth in Q4, 2019-20 apart from the services sector which showed some increase in credit growth quarter on quarter. However it remained much lower than the previous year numbers. This sign of increase in the services sector credit growth is encouraging as this is the highest contributing sector in terms of GDP growth. However the growth rate of creidt in all other sectors declined with the most severe been the drop in credit growth in the industrial sector. It is to be noted here that if one compares the sectoral growth rate with the same quarter last year, then there is a severe drop in the sectoral growth rates in all sectors including the services sector.

Lack of demand has been a problem in the Indian economy. The private consumption numbers has shown steady decline quarter on quarter. Personal credit growth is driven by the demand. If we look at the monthly trends it is seen that the personal credit growth showed a increasing trend for the first two months of Q4. But March witnessed a significant decline driving the overall personal credit growth down from the last quarter and significantly less than the same quarter, previous year.

What can be the possible GDP growth for Q4

After showing some encouraging trend in the first two months of the quarter, there was a dismal performance in the third month leading to a overall drop in performance of the economic indicators both in the demand and supply side. One needs to keep in mind that lockdown in the entire country happened for only 7 days in March. What can then explain such a dismal performance of all the economic indicators in March which drove the overall quarter numbers down. One primary reason is the global spread of the pandemic. The manufacturing sector in India is very much dependent on the raw materials coming from mainly China. With the Chinese economy under lockdown the supply chain was acutely impacted and hence we see a severe drop specifically in IIP growth, a mojor contribution of which is from the manufacturing sector. The first two months of quarter 4 showed some encouraging trends. But the situation reversed in March.

 There has been no consensus in terms of the forecast by several organisations. While Care ratings puts the growth at 3.6%, CRISIL on the other hand forcasts the growth to be 0.5%.

IPD finds that among all the indicators, IIP , growth rate in Personal Credit and Core sector growth has very high correlation with the GDP growth rate. This is followed by the credit growth rate of service sector. While IIP and growth rate in personal credit showed a decline from last quarter with the drop in IIP being severe as discussed above, the core sector growth and the credit growth in services sector has increased as compared to the previous quarter. Let us wait for tomorrow for the Q4 growth estimates.

A SURVEY ON PEOPLE’S PERCEPTION OF THE COVID PANDEMIC AND THE GOVERNMENT RESPONSE: FINDINGS

The country, like most parts of the world, has been fighting with the covid19 pandemic. As of date, the number of covid19 infected cases in the country stands at 1, 38, 845 (77, 103 active cases) with 4021 deaths. A nation-wide lockdown was imposed by the central government from midnight of 24th March which continues till date with greater relaxations coming in over time. The present phase of lockdown, phase 4.0, is till 31-st May, 2020.

IPD conducted an online poll recently to understand the perceptions of people of the country concerning the covid19 pandemic and more specifically the handling of the same by the government and its various agencies. The data was collected online between 15th and 21st May. A total of 520 people responded to the survey – across several locations in the country, encompassing 24 states & UTs. The key findings of the survey follow:

I. Impact of covid19 on daily life routine:

Unsurprisingly, majority state that covid19 has had a big impact on their daily lifestyle/routine

II. Opinion about the central government’s handling of the covid19 crisis:

Perception of the central government’s overall performance is mixed – roughly 1/3rd consider it to be on the positive side while a similar proportion rate it as negative

III. Opinion of the state government’s handling of the covid19 crisis:

More than 2/5th of the respondents are unhappy with the state governments’ handling of the situation

IV: Opinion about the central government’s handling of the migrant labour situation:

Very clear trend on the handling of the migrant labour situation – every 2nd respondent considers the government’s tackling of the situations as “very poor” – only 6% rate it as positive

V: Opinion about the state governments’ handling of the migrant labour situation:

Even for the state governments, the public impression of the handling of the migrant labour situation is more on the negative side

VI: Impact of migrant labour crisis handling on overall performance rating:

Poor handling of the migrant labour crisis is clearly having a major negative impact on perception of overall performance – similar for central and state governments

VII: Areas where performance needed to be better – Central government

In terms of parameters where the people feel the central government could have done better, the top 3 are: (1) earlier restriction on incoming international travel (II) greater nos. of tests done & (III) adequacy of PPE & other essential gears to medical teams

VIII: Areas where performance needed to be better – state govts.

The top 3 areas of where state governments could have done more are: (i) Higher no. of testing (ii) Better enforcement of the lockdown and (iii) Better management of medical facilities, quarantine centres etc.

IX: Opinion about central government’s financial relief package

On the financial package announced to counter the economic impact of covid, the people have rated the government response favourably at this point in time

X: Concern about threat of covid with lockdown easing:

As the lockdown gets relaxed gradually, concern of getting infected by covid is high among people

The Math of The Economic Package

India has been in lock down for over 2 months with limited economic activity. The Reserve Bank of India yesterday has hinted that the GDP growth for the current financial year can be negative. Many rating agencies has predicted negative growth rate for India for the current financial year while some has predicted a low positive growth which also is the lowest in almost 40 years. The government of India and the Reserve Bank of India has announced host of economic packages during this lock down period to boost the economy so that the dismal impact on economy can be controlled for. Here is a overview of the packages announced since the lockdown started from March 25th.

Source: Ministry of Finance, Government of India

So a total of 10.3% of GDP was announced as a package. Now this has both monetary and fiscal components. Let us analyse into this components of the package.

Components of Economic Package

The total package announced by the government has a significant portion which provides additional liquidity and credit opportunities to the market. So these measures means that banks and other financial institutions now can lend more. So the money allocated in terms of liquidity and credit measures will be effective if the credit offtake from banks and NBFCs match the additional liquidity provided by measures taken by the RBI and the government in terms of providing additional liquidity and credit. Now both of these measures comprise almost 80% of the total economic package announced.

There is a commitment of creating new funds as part of this package like the agriculture infrastructure fund, animal husbandry funds and so on. Then there are measures of tax reduction, providing food or cash to people, health related measures, some of them has immediate impact or some may have longer term impact. There has been a lot of debate around what is the exact portion of fiscal measures of this economic package.

Fiscal Measures of the Economic Package

There has been some amount of variation in terms of measuring the exact government expenditure or fiscal commitment announced in the economic package. Different expert organisations have come up with their view on the estimate of fiscal contribution committed in the economic package as a percentage of GDP. The estimates ranges from 0.7% to 1.5% of GDP. Indian National Congress in its press conference puts this at 1.6%. Why do we see this variation?

If one looks into all the components of the package then the total government commitment comes to be 1.8% of GDP. Now there has been debate on some of the components of the fiscal measures for which we see such variation.

  • TDS relief: The consensus on this among all tax experts is that though this might give some immediate relief but the tax liability will remain the same and hence this should not be considered as part of fiscal measure.
  • Government Commitment to Funds : The consensus view here is that these are off-budget items and the contribution of the government in these funds is not mentioned. Hence this is not considered as part of fiscal measure.
  • Government Contribution to Credit: Out of the total 3.5% of GDP allocated for additional credit, there is a government commitment of 0.1% of GDP. Now there is an argument that since providing credit does not mean any immediate disbursal of funds and this will only kick in when people takes loan. So this money will not be in the market in the short to medium run. Hence some of the organisations have not considered this as part of fiscal measure.
  • Already Budgeted measures: Some of the measures taken as a component of the first package announced in 26th March were already budgeted as part of the budget for Financial year 2020-21, tabled in the parliament on 1st February, 2020 and is not a new allocation for covid relief like the commitment in terms of PM Kisan measure which was just front loaded now, the allocations for construction workers welfare fund and district mineral foundation fund. Hence many organisations don’t consider the already budgeted portion as part of the fiscal measure.
  • Immediate impact: The government has allocated funds to food micro enterprise, fishery and herbal which according to some experts will not have impact in the short to medium term. Hence some of the organisations have not considered this as part of fiscal measure.

What has been the direct cash transfer measures of the fiscal component of the economic package? Let us look into it.

DIRECT CASH TRANSFER MEASURES

Many economists has been prescribing that Covid 19 and the resulting lock down will lead to a huge loss of income and hence there should be direct cash transfers to people as that will generate demand and will kick start the economy while there are others who feel that the resultant increase in fiscal deficit because of direct cash transfers will be huge and will be detrimental for the country . Let us see what are the direct cash transfer measures taken by the government as part of the economic package.

Now it is seen that all the above measures together contribute to 0,54% of GDP. Now this includes the front loading of the PM Kisan funds, which is not a new allocation. So new allocation in terms of cash in hand boils down to be 0.45% of GDP. Now the additional amount allocated for MGNREGA will only be paid once works are done on this and hence the impact of this might not be immediate. So the new allocations in terms of cash in hand component which will have a immediate impact boils down to 0.25% of GDP.

Conclusion

A sizable section of the economic package talks of providing more liquidity in the market. It is to be seen in the next few months that how much is the credit off take witnessed by the financial institutions. In terms of fiscal component of the economic package the experts put this in the range of 0.7% to 1.5%. Now this additional fiscal commitment made as part of the economic package will lead to around 1-2% increase in the fiscal deficit. How effective the fiscal stimulus will be and whether it is sufficient remains to be seen in the months to come. There is a need of constant monitoring of the effectiveness of each of the measures announced and quick action needs to be taken if something appears to be not working.

COVID 19 Spread : Status Update India as of May 23rd

There are over 5.37 million cases of COVID-19 in the world today with over 342,727 deaths. In India there has been 131423 ( covid19india.org) cases till now with 3868 deaths. Here is a summary of the situation in India.

All India Level

Data Source: covid19india.org

There are over 40775 new cases in the week of 17th May to 23rd May with 35 states and Union territories impacted all across the country. The weekly growth rate remained same as compared to last week. There has been a 45% increase in the total number of cases in the week. During this week there has been a 35% increase in the total number of deaths from 2871 in the week ending on 16th May to 3868 in the week ending on 23rd May.

Data Source: covid19india.org

SEGMENT LEVEL ANALYSIS

IPD divides the country into different risk segments based on the total number of cases in the state and the weekly growth rate. Here is how the segments are defined.

The distribution of states across the segments are as under:

Data Source: covid19india.org

Karnataka and Odisha has moved into extremely severe risk segment. Haryana, Jharkhand, Assam, Uttarakhand and Chhattishgarh are among the states which moved into higher risk segments. Punjab has seen less than 10% growth in the number of cases and has moved to a lower risk group in this week. 5 states and UTs show no new cases this week. Maharashtra, Bihar , Assam, Karnataka, Odisha , Chhattisgarh, Jharkhand among the big states and Goa, Uttarakhand, Manipur and Puducherry among the small states and UTs have a weekly growth rate of more than 50% this week.

Data Source: covid19india.org

The extremely severe risk group show a 59% increase in the number of cases. The severe and very high risk groups also have a higher growth rate as compared to the national growth rate. There has been no new cases in 5 of the 7 low risk group states and UTs. The extremely severe group and the very severe group combined has lion’s share in the new cases this week with over 97% of the new cases coming from this group followed by the very severe risk group. The share of new cases across segments falls as the risk of the segment falls.

Data Source: covid19india.org

In terms of total number of positive cases per 100 tests conducted, it is seen that the percentage is significantly higher in the extremely severe risk group as compared to the others. This reflects the need to conduct more tests in the higher risk groups as more positive cases are coming from these groups. It is to be noted here that the percentage of positive cases per 100 test has seen a increase in the all India level in the week ending on 23rd May as compared to the previous week. This increase has been mainly concentrated in the extremely severe risk group and the very severe risk group.

Data Source: covid19india.org

Moreover in terms of recovery rate, the extremely severe risk group has a lower recovery rate compared to the other risk groups. India overall has a better recovery rate than the world recovery rate of 87%. Even the extremely severe risk group also has a higher recovery rate than the world average.

Data Source: covid19india.org

STATE LEVEL ANALYSIS

Data Source: covid19india.org

Maharashtra, Gujarat and Tamil Nadu are the top three states and UTs in terms of the spread of COVID-19 cases. The three states together account for over 58% of all the cases in the country. Maharashtra alone contributes to 33% of all the cases in the country. Delhi and Rajasthan are the other two states in the top 5. Five states and UTs show no new cases this week. This week there has been over 1800 cases which were not assigned to any state by the Ministry of Health and Family Welfare.

Data Source: covid19india.org

Maharashtra, Delhi and Telengana has the highest number of positive cases per 100 tests conducted while there are 16 states with less than 1% positive cases out of the total number of tests conducted in those states. There are 5 states which have higher percentage of positive cases per 100 states than the national average of 4.1%. Maharashtra has seen a significant increase in percentage of positive cases per 100 test this week as compared to the previous week. This has lead to the rise in national rate.

Data Source: covid19india.org

Kerala, Tamil Nadu an Odisha has been the leading states in terms of recovery rate. West Bangal has the lowest recovery rate among all the states and UTs. Maharashtra and Gujarat, which are among the top states in terms of the total number of cases, has low recovery rates and are the bottom three states in terms of recovery rate. One silver lining is that all these three states have shown some improvement in recovery rate as compared to last week. West Bengal is the only state in India where the recovery rate is less than the world average. All other states have recovery rate more than 87%, which is the world average.

CITY LEVEL ANALYSIS

Data Source: covid19india.org

Based on the spread of COVID 19 and also the weekly growth rate, IPD groups the top 20 cities in terms of COVID 19 cased into 4 risk groups. The highest risk group has 5 cities of which three are from Maharashtra. Mumbai and Delhi both fall in this risk group. This risk group contributes to 48% of all the COVID cases in the country. A special task group needs to be created for each pf these 5 cities falling in the highest risk group.

Data Source: covid19india.org

Almost 62% of all the cases in the country comes from 10 cities in the country. Another 8.5% comes from the next 10 cities. So only 20 cities put together contribute to over 70% of all the cases in the country. Mumbai, the financial capital of the country alone accounts for over 21% of the total number of cases in the country. In the top 10 cities there are three cities from Maharashtra ( Mumbai, Pune and Thane), two cities from Gujarat (Ahmadabad and Surat) and one city each from Rajasthan ( Jaipur) Madhya Pradesh (Indore), West Bengal (Kolkata) and Tamil Nadu (Chennai) respectively. The national capital region of Delhi also falls in the top 10 cities.

Data Source: covid19india.org