The high-frequency lead indicators suggest that a fragmented recovery of the Indian economy is underway, investment information firm ICRA has said.
The year-on-year performance of 11 of the 16 available indicators staged a pickup in August relative to July, it said in a report on Indian economy.
India's gross domestic product shrank by 23.9 per cent in the first quarter of current fiscal as against 5.2 per cent growth in Q1 FY20 due to COVID-19 led countrywide lockdown and other factors.
The ICRA report said output of Coal India, motorcycles and rail freight traffic posted a turnaround to an expansion in August after having displayed a contraction in the previous month.
At the same time, the pace of contraction in the production of scooters and passenger vehicles, domestic airline passenger traffic, port cargo traffic, GST e-way bills as well as consumption of aviation turbine fuel and petrol narrowed at a varying rate in August.
However, the year-upon-year performance of diesel consumption, thermal and hydroelectricity generation, non-oil merchandise exports and bank deposits worsened in August from July, which may be intermittent setbacks before the economy fully recovers from the impact of the ongoing crisis.
"Moreover, the available trends suggest that the contraction in the Index of Industrial Production could ease to 6 to 8 per cent in the just-concluded month from 10.4 per cent in July," said the ICRA report.
The contraction in non-oil merchandise exports too worsened in August from July with demand constrained by rising COVID-19 infections in various trading partners, it said.