An unfortunate consequence of Covid-19 is the adverse impact on the economy. India’s economy contracted by 23.9% in the first quarter of the fiscal year, according to data from the government. It reveals that all sectors of the economy, except agriculture, shrank in the first quarter. Beyond the national level, however, we are keen to understand how state economies are doing. It might be a while before the data on state economies becomes available, so we used micro-data from the Google mobility report to analyse contractions in economic activity across states.
We studied trends in the retail and recreation sector such as visits to restaurants, malls, commercial centres and so on to gauge the impact of Covid-19 on economic activity. The analysis reveals an overall sharp contraction of approximately 38% that still prevails across India, compared to the period prior to Covid (January 3 to February 6). The time trend