Lower electricity consumption in India during lockdown gives an insight into declined economic activity

Electricity consumption in India declined significantly during the coronavirus-enforced lockdown, indicated how the restrictions impacted economic activities in the country, a World Bank report said.

Although the report compiling data from late March to June was published last month, it was shared by World Bank Energy on Twitter on Tuesday.

The daily electricity consumption during the lockdown was compared to the predictions of a consumption model that, among others, considers seasonal patterns, the temperature, and holidays, the report said.

The first meaningful deviation from normal levels from the prediction of the consumption model, was on March 22, when India observed a 14-hour long 'Janata Curfew' on the call of Prime Ministere Narendra Modi.

"Electricity consumption dropped further over the next few days and especially after the national lockdown was implemented on March 25. It was nearly 30% below normal levels at the end of March and remained a quarter below normal levels in April. In May, when some restrictions were eased, electricity consumption was on average 14% below normal and in June it was still 8% below normal. Electricity consumption seems to have stabilized at around 5% below normal at the end of June," the report noted.

The report authored by Robert CM Beyer, Sebastian Franco Bedoya and Virigilo Galdo said the lower electricity consumption implies lower economic activity.

"The two are closely linked and with the help of some assumptions, it is possible to provide an approximation of the economic costs that have so far occurred from COVID-19. In the past, a unit of additional economic activity in India has been associated with 1.3 units additional electricity consumption. If we add up the daily losses in economic activity using that relationship, depending on exactly how we count the days, the economic impact has already been between $160 billion (5.6% of GDP) and $175 billion (6.0% of GDP)," the report published on August 11 said.

The economic disruption is also visible from outer space with India becoming darker during the period.

"While Indian districts are on average getting brighter over time, luminosity in evening hours has declined since March. Nighttime light intensity can be used to examine the effects of COVID-19 at the district level. In April, for example, nighttime light intensity declined in more than two thirds of the districts and the average decline was over 10%. Interestingly, the more COVID-19 cases are recorded in a district, the larger is the decline in nighttime light intensity," the report said.

The lockdown in India was imposed in late March while the restrictions started easing in June. There are almost no restriction on economic activity now but the economy is yet to take off fully.

India's COVID-19 caseload rose to 42,80,422 on Tuesday with 75,809 instances of the viral infection recorded in the last 24 hours, while a record 1,133 fatalities took the death toll to 72,775, the Union health ministry data showed.

India's single-day rise in cases dipped on Tuesday, after recording over 80,000 cases daily for five days in a row. India recorded a spike of over 90,000 cases on Sunday and Monday.

According to the data, there are 8,83,697 active cases of coronavirus infection in the country which comprises 20.65 per cent of the total caseload.

India's economy is expected to contract 10.5% in the current fiscal before bouncing back in the next financial year, Fitch Ratings said on Tuesday.

India's gross domestic product (GDP) contracted by a massive 23.9% in April-June and some agencies have predicted negative growth even during the July-September quarter of the current fiscal (April 2020 to March 2021).

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