The PHDCCI Economic and Business Momentum (EBM) Index

PHDCCI's India-Nepal Centre
The PHDCCI Economic and Business Momentum (EBM) Index
April 2021 economic activity significantly higher than April 2020: PHD Chamber

April 2021 economic activity significantly higher than April 2020: PHD Chamber

Though the second wave of Covid-19 has severely impacted the country as compared to the first wave in 2020 with record active cases, daily new cases and deaths, lead economic and business indicators have shown a higher growth in April 2021 as compared with April 2020. PHDCCI Economic & Business Momentum (EBM) Index of 25 lead economic and business indicators at 99.8 for April 2021 is significantly higher as compared with 78.3 for April 2020 at the base of 2018-19 = 100, said Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry, in a press statement issued here today.

PHDCCI EBM Index2018-19=100April 2017April 2018April 2019April 2020April 2021

Source: PHD Research Bureau, PHDCCI EBM Index

Lead economic and business indicators such as cement, steel, consumer durables, GST collections and external commercial borrowings have shown a noteworthy improvement  in April 2021 as compared to the April 2020, said Sanjay Aggarwal.

However, sequentially, the PHDCCI EBM Index has shown a slight decline for April 2021 to the level of 99.8 as compared to 100.3 for March 2021. Amid an uncertain economic environment created by 2nd wave of coronavirus, the trade and industry have been impacted by the restrictions in various parts of the country, depressed demand and investment scenario and reduced spending on non-essential items, said Sanjay Aggarwal. 

PHDCCI EBM Index2018-19=100January 2021February 2021March 2021April 2021

Source: PHD Research Bureau, PHDCCI EBM Index

Based on the April economic activity and movement of EBM Index, a significantly higher growth trajectory is anticipated for Q1 FY 2021-22. The quarterly movement of PHDCCI EBM Index and quarterly GDP growth rates are highly correlated at 0.9 as depicted in Chart-2, said Sanjay Aggarwal.

 Chart-1 : PHDCCI EBM Index: Monthly Trend (Base: 2018-19=100)Chart-2 : PHDCCI EBM Index (Base: 2018-19=100) and GDP Growth Rates (in %): Quarterly Trend

Source: PHD Research Bureau, PHDCCI EBM Index; GDP growth figures compiled from MOSPI

Going ahead, effective policy measures are needed once again to support demand and to have a multiplier effect on production possibilities, expansion of employment in factories, expansion of capital investments and overall virtuous circle of the growth trajectory, said Sanjay Aggarwal.

There is a need to lower interest rates for consumers and businesses, lesser compliances for MSMEs vis-à-vis ease of doing business at the ground level and a lower tax regime to increase the personal disposable income of the people, he said

Frontloading the National Infra Pipeline expenditure would provide a much needed multiplier effect to create aggregate demand in the economy and to strengthen the economic recovery,  said Sanjay Aggarwal

More and more direct benefit transfers needs to be considered for the urban and rural poor under the various welfare schemes in addition to the free distribution of dry rations till Diwali as already announced by the Hon’ble Prime Minister, he said

A substantial stimulus to create effective strides for futuristic growth trajectory and to diminish the daunting impact of the second wave of the pandemic coronavirus on trade and industry would be crucial to support the economic momentum in this extremely difficult time, said Aggarwal

At least 75% of the population of country needed to be vaccinated with both doses of vaccination by December 2021 to do away with the uncertainty in the economy, said Sanjay Aggarwal.

PHDCCI EBM (Economic and Business Momentum) Index has shown steady recovery from the lows of 78.3 in April 2020 to 85.7 in May 2020, 91.6 in June 2020, 95.5 in July 2020, 95.9 in August 2020, 96.5 in September 2020, 96.8 in October 2020, 98.4 in November 2020, 99.2 in December 2020, 99.3 in January 2021, 99.2 in February 2021, 100.3 in March 2021 and 99.8 in April 2021, with a base of 2018-19=100.

PHDCCI EBM Index is a composite index of 25 lead economic and business indicators with base year at 2018-19=100, which considers the demand and supply indicators to present a broad perspective of the economy. The 25 indicators include the IIP Consumer durable goods, IIP Consumer non-durable goods, IIP Capital Goods, IIP Intermediate Goods, Coal, Crude Oil, Natural Gas, Petroleum Refinery Products, Fertilisers, Steel, Cement, Electricity, Consumption of Petroleum products, Export Merchandise, Export Services, India Freight Traffic, Credit to Agriculture, Credit to Industry, Credit to service sector, Personal Loans, GST Collections, SENSEX, FDI Equity Inflows, External commercial borrowings and Unemployment.

Full PHDCCI EBM Index report attached


Base: 2018-19=100

Sr NoEconomic IndicatorsApr-20Apr-21(Apr’21 – Apr ’20)
1IIP Consumer durable goods59388
2IIP Consumer non-durable goods6412561
3IIP Capital Goods88981
4IIP Intermediate Goods3912081
6Crude Oil8684.3-2
7Natural Gas8610721
8Petroleum Refinery Products8110725
13Consumption of Petroleum products5810547
14Export Merchandise Growth5014797
15Export Services1211288
16India Freight Traffic981079
17Credit to Agriculture1041117
18Credit to Industry102100-1
19Credit to service sector111101-10
20Personal Loans1121131
21GST Collection32141109
22SENSEX (Daily average)11217765
23FDI Equity Inflows7473-1
24External commercial borrowings5412975
Composite Weighted Index7810022

Source: PHD Research Bureau, PHDCCI EBM Index Note: For calculation purpose, theFDI figure for April 2021 is average of last 3 months; figures are rounded off

This article is shared with Prittle Prattle News in the form of a Press Release.

By Reporter