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Expressing concerns, rating agency ICRA has said the growth momentum lost steam in November 2021 on the back of ‘some satiation’ of pent-up demand as well as supply chain disruptions in parts of south India on account of untimely rainfall. It said that as many as 12 of the 15 lead indicators recorded a deterioration in their Y-o-Y performance in that month, relative to October 2021. On the other hand, it said vehicle registrations, passenger vehicles (PV) output and non-food bank credit of scheduled commercial banks showed a modest YoY improvement in November 2021, relative to the previous month.

The agency said the number of indicators surpassing their pre-Covid levels eased to seven in November 2021 from nine in October 2021. It added the early data for December 2021 is mildly positive, and second shot coverage appears set to rise to 61 per cent of Indian adults by the end of the month. However, it remains to be seen whether the existing Covid-19 vaccines will offer protection against the Omicron variant and avert a third wave in India. The ratings agency also said that amidst the heightened uncertainty generated by Omicron, convincing signs of a durable and sustainable recovery are yet to emerge. In month-on-month (MoM) terms, the agency cited that nine of the 13 non-financial indicators witnessed a decline in November 2021, broadly reflecting the impact of a higher number of festive-related holidays.

Moreover, untimely heavy rainfall in the southern states appears to have led to supply chain disruptions, weighing upon activity in November 2021. Only the output of PV and Coal India (CIL), domestic airlines' passenger traffic and auto retail volumes recorded an improvement in November 2021, relative to the previous month. In addition, 'FASTag' toll collections and retail payments declined in November 2021, after having reached all-time highs in October 2021, while the mobility for retail and recreation continued to improve sequentially.