If the power outage becomes widespread, it will affect industrial production

MUMBAI: If the power outage becomes widespread, it will affect industrial production in the short run, and higher energy costs will put pressure on companies' margins and push up retail inflation, according to a report by ratings agency Nomura.

In its weekly report, it said that the Nomura India Business Resumption Index (NIBRI), which stood at 104.50 at the end of the week, has risen to 104.10 at the end of the week.

As the country's economic situation returns to normal after the Corona period and demand for electricity increases with the current holiday season, supply disruptions could be a hindrance to the pace of growth, Nomura said in a report.

The current rise appears to be more broad-based than when the index rose to 108 at the end of September.

Google Mobility Indices, Driving Mobility from Apple, Power Demand and Labor Force Participation Rate are covered in the NIBRI calculation. February 8, 2020 is considered as the base week for comparison.

If the power outage becomes more widespread, it will not only disrupt industrial production in the short term, but higher energy costs will put pressure on companies' margins and increase retail inflation, according to a report by Nomura.

GST e-way bills have been disappointing in September, however, revenue from railway freight and land has increased and bank lending has increased. Power demand slowed year-on-year growth in September, but remained higher than two years ago, the report added.

Nomura estimates that the country's economic growth rate for the current financial year will be 7.50%. With the exception of the services sector, most of the economic indices have reached or are close to the previous level of Coro. Instead of growth in the service sector, it is currently seeing a stabilization which indicates that growth will be tough after the normalization is over.