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Data: USA, Canada, UK, & Australia Accounted For 75% of The Indian Nationals Who Went Abroad For Education in 2022, Up From 60% in 2018
Sai Krishna Muthyanolla
February 20, 2023
Data provided by the government in the Parliament indicates that the number of Indian nations who travelled abroad for education in 2022 crossed 7.5 lakhs, the highest till date for any year. USA, Canada, UK, & Australia together accounted for 75% of those who went abroad for education in 2022, up from 60% in 2018.
Migration of students transcending national borders for education is a growing phenomenon in the 21 century. Often termed as global or international student mobility, this trend is booming. The scope and pace of such migration is a dynamic of demand and supply. The demand side drivers behind student mobility include the aspirations of better educational and employment opportunities, while the supply side factors include the expanding financial capacity of middle classes, short supply of good and quality education, among others.
India is a formidable player in the global student mobility. It ranks only behind China in the supply of internationally mobile students. India is also among favourites for international universities eying to attract these mobile students. Despite concerns of ‘brain drain’, India is poised to remain as a growing market for international education.
In this context, we look at the trends in Indians migrating abroad for education and foreigners coming to India for higher education.
Note: Data provided by the Bureau of Immigration is considered for the analysis. It has to be noted that there may be double counting of individuals as the data is based on students who specify education as their purpose of visit or the sort of visa for the country of destination they present while clearing immigration. If the same person may have cleared immigration in multiple years, he/she may have been counted in each of these years. Despite this limitation, the data helps understand broad trends.
65% increase in Indians travelling abroad for education from 2017.
Usually, the Bureau of Immigration under the Ministry of Home Affairs keeps track of Indians arrival and departure information. Students who travel overseas to attend foreign universities are not required to register in India or at Indian embassies. Indian students who want to study abroad for a higher degree apply for student visas directly at foreign embassies and consulates with offices in India.
As a result, there is no index that includes the group of Indians who travel abroad for higher study. The data from the students who specify education as their purpose of visit or the sort of visa for the country of destination they present while clearing immigration are both used to arrive at the data on students going abroad for education.
The data from the parliamentary responses show that there is an increase by 65% in the number of students travelling overseas for educational purposes in 2022 compared to 2017. Around 4.5 lakh students travelled abroad for education in 2017, which increased to 5.8 lakh in 2019, before witnessing a downfall to 2.6 lakh in 2020 because of COVID-19 and its associated restrictions. As campuses started re-opening, the students travelling overseas increased rapidly, with 4.4 lakh and 7.5 lakh students in 2021 and 2022, respectively.
Significant increase in loans disbursed for students availing education abroad.
As mentioned earlier, multiple factors play a role in driving students to pursue education abroad. Among such factors, national policies, and access to finance are key drivers. The data from 2012-13 from public sector banks (PSBs) indicate a steep increase in the number of students availing educational loan to study abroad and the amount disbursed to those students. As per a parliamentary response, around 20,366 students availed educational loan to study abroad in 2012-13, which rose to 62,947 in 2019-20. It then declined to 51,784 in 2020-21 due to COVID-19 and increased to 69,898 in 2021-22.
Similarly, in 2012-13, the amount disbursed stood at 1180 crores, which rose to 5885 crores in 2019-20, thereafter which it declined to 4503 crores in 2020-21. However, in 2021-22, it grew to 7576 crores, registering a 28% increase as compared to 2019-20.
Canada, UK outperform USA as preferred destination.
Over the past decade, as the number of students travelling abroad has expanded, their preferences over destinations have also changed. Yet, the United States continues to be the top host nation followed by Canada. However, if we look at the growth of Indian students travelling abroad from 2018, United Kingdom and Canada has seen greater growth than the United States. UK registered a massive growth of 294% in the influx of Indian students, while Canada and US registered 63% and 57% growth respectively in 2022 compared to 2018. China registered a decline by almost 94% in 2022 as compared to 2018, while students in Ukraine declined by 88% in 2022 as compared to 2021 probably because of the war.
Some possible reasons behind such growing preferences for other destinations include the disruptions in visa processing systems resulting in longer waiting periods for United States, the trends in employment and residential opportunities and national policies of those nations towards immigrants among others. The growing competition among nations to attract international students is also resulting in the relaxation of immigration and visa rules, expanding logistical and financial support to students.
Minimal growth in foreigners choosing India as their higher education destination.
India ranks as one of the major contributors of global mobile students. It is evident from the available data that the share of Indian students travelling abroad for education is increasing. Successive governments adopted different strategies to promote internationalization of higher education in India. Among them, creation of around 15% and 10% supernumerary seats in NITs and IITs respectively for foreign students is a major step to enable foreign students to receive quality education. The Direct Admission of students Abroad (DASA) scheme is for admissions into the NITs. Within the 15% quota in NITs, 5% seats are reserved for children of Indian workers in the Gulf (CIWG). Countries such as UAE, Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and Oman are included under CIWG.
However, data from the All India Survey on Higher Education (AISHE) indicates that there is a very minimal growth in the number of foreign students choosing India for their higher education. It is safe to say that the number of foreigners enrolled in higher education in India is almost stagnant for the last five years or so. A significant majority of the foreigners choosing India belong to neighbouring countries.
The internationalization of higher education in India has not grown at a rapid pace. There is a greater need for the governments to look across the internationalization strategies employed by other nations to transform India into a global education hub. The New Education Policy (NEP) 2020 talks of measures to promote internationalization of higher education.
Nepal accounts for more than one-fifth of the foreign students in India
The number of foreign students travelling to India for higher education has remained stagnant over the past five years. However, the data on share of foreign students coming from different nations suggests that five countries, Nepal, Afghanistan, Bhutan, Sudan, and Nigeria account for almost 45% of the total foreign students in India.  Share of Nepal in the total foreign students rose from 21% in 2012-13 to 28% in 2020-21, while share of Afghanistan grew from 6.7% to 8.5% during the same period. In contrast, share of students from Bhutan declined from 7.1% to 3.8% during the same period.
Almost 75% of the foreign students every year are enrolled in undergraduate courses, followed by post-graduate courses. And barring few exceptions, number of male students coming from these countries remains higher than the number of female students.

created: February 20, 2023


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USA continues to be leading source of Remittances while India is leading destination
Sai Krishna Muthyanolla
November 26, 2021
Remittances data of the last 20 years indicates that the USA continues to be the leading source of global remittances while India continues to be the leading destination of inward remittances. Gulf countries have also emerged as leading sources of remittances. Data also indicates the impact of economic crises in leading sources on the quantum of inward remittances.
In the earlier story, we reviewed the trend in ‘Global Inward remittances’ during 2020, the year when the pandemic ravaged most countries in the world. We also looked at the estimates for 2021 based on the 35 edition of World Bank Group’s Migration and Development Brief.
As per the estimates for 2021, the remittances to Low- & Middle-Income countries (LMICs) are set to increase by 7% after a slight fall in 2020. In this story, we look at the trends in remittances across the world over the past twenty years and analyse trends for the top sources & destinations for remittances.
Share of remittances to LMICs increased by around 20% in the last 20 years
In 2021, the value of Global inward remittances is estimated at USD 751.2 billion, marking a recovery from the fall in 2020 when it was USD 705.5 billion. This is 3.5 times higher than the value of global inward remittances 20 years ago, i.e., USD 163.5 billion in 2002.
During the last 20 years i.e., 2002-2021, the highest growth rates were seen during the first 6 years until 2009, following which there was a fall in the global inward remittances. It fell by USD 22.7 billion in 2009 compared to 2008. The Global Financial Crisis of 2007-08, and the resulting impact on economies around the world, especially in some of the more developed countries in the world, could be the prime reason for the fall in remittances in 2009. While there was a positive growth rate in the ensuing years, the growth rate failed to reach the levels of pre-2008 i.e., before the global financial crisis.
There was a negative growth of remittances in 2015 & 2016 as well. The impact of low oil prices on the economies of countries like Saudi Arabia & other Gulf countries is considered the major reason for the fall in the remittances during these years. Gulf countries are some of the major sources of remittances.
Remittances picked up in the ensuing years only to fall in 2020, due to the impact of COVID-19.  As highlighted in the earlier story, the remittances to LMICs form the major chunk of the global inward remittances. The trend in inward remittances to LMICs is reflective of the global trends.
A significant trend of the last 20 years is the increase in the share of remittances to LMICs. In 2002, remittances to LMICs accounted for around 59% of the global remittances, which is estimated to be more than 78% in 2021. A slight fall in the share of LMICs in global remittances was observed in 2009 & 2015. Except in these years, their share has consistently increased over the last 20 years.
India maintains its position as the leading destination for remittances, China & Egypt emerge as leaders
As indicated in the earlier story, India is the top destination for inward remittances. In 2021, remittances to India are estimated to be around USD 87 billion, after a slight fall in 2020. All through the 20 years between 2002 & 2021, India has remained as the top destination for inward remittances except on odd occasions. The value of remittances to India grew by 4.5 times during this period.
The global financial crisis had only a marginal impact on remittances to India, with remittances in 2009 falling to USD 49.2 billion compared to USD 49.98 billion in 2008. Comparably, a considerable impact was observed in 2015 & 2016. In 2016, the remittances fell to USD 62.7 billion from USD 68.9 billion in 2015. The value for 2015 itself was lower than the previous year. As pointed out earlier, the economic impact on petroleum-dependent economies of Gulf countries resulted in a substantial fall in inward remittances. The increased impact in 2016 than in 2009 proves India’s greater reliance on gulf countries for inward remittances compared to the others.
The trend over the past twenty years varies across the countries. Here is a snapshot of the trends.
UAE & Kuwait record increased outward remittances in the past 20 years
The USA continues to be the source for the highest outward remittances over the past 20 years. The outward remittances from the USA reduced post the global financial crisis in 2008 and continued until 2011. Since then, there has been a continuous increase in the outward remittances from the USA, except for 2020. The estimates for 2021 aren’t available yet, but there could be a recovery if the increased estimates for inward remittances are any indication.
Most of the leading countries for outward remittance have witnessed an increase post the global financial crisis. The Gulf countries of UAE, Kuwait, Qatar have improved their position as leading sources of outward remittances. Kuwait along with Saudi Arabia has experienced a fall in outward remittances during the 2014-16 period. This is reflected in the fall in inward remittances of the countries dependent on these, as highlighted earlier in the story.
However, the outward remittances of UAE did not witness any fall even during the low oil price period (2014-16). A slight fall in outward remittances from UAE was observed only during the COVID-19 pandemic. This could mean that UAE’s economy is not solely dependent on oil.
China, which is one of the leading destinations for inward remittances also witnessed an increase in its outward remittances for the past few years.  Switzerland is another country that has seen consistent and exponential growth in outward remittances.
Any economic disruption in major source countries has a domino effect in the destination countries
The review of the data over the twenty-year period highlights the emergence of new countries as leading destinations for inward remittances. This can be corroborated with the increase in outward remittances from countries where a substantial number of immigrants from the source countries have found employment.  Mexico’s migrants in USA and Indian migrants in the Gulf economies are the major source of inward remittances in their respective countries.
Also evident is the impact the economic situation in source countries has on the quantum of inward remittances. The global financial crisis of 2008 impacted inward remittances in countries largely dependent on the USA while the lower oil prices in 2015-16 affected inward remittances in countries dependent on the gulf countries.
Data indicates that COVID-19 may have had a global impact with most countries witnessing an economic slowdown resulting in reduced inward remittances. With the increase of migrants in European countries, due to the crisis in Syria and other middle-eastern countries, there could be a shift in the trend of inward/outward remittances in the times to come.

source: news-factly

created: November 26, 2021

license: Creative Commons - Attribution - https://creativecommons.org/licenses/by/4.0/

author: Sai Krishna Muthyanolla


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Data: Utilization of ‘Cesses & Surcharges’ for the intended purpose remains a concern
Sai Krishna Muthyanolla
March 8, 2021
As we highlighted earlier, the increase in the share of ‘Cesses & Surcharges’ in centre’s ‘Gross Tax Revenue’ has been a cause for concern. Data indicates that the centre is increasingly resorting to ‘Cesses & Surcharges’ to mop-up revenues as the utilization of these ‘Cesses & Surcharges’ is paltry.
In the earlier story, we looked at the history of Cess in India and explored the backdrop of the cesses not being included in the central divisible pool which meant that states did not get a share of cesses & surcharges. As per data available in the XV Finance Commission report (XVFC), there is a notable increase in the share of ‘Cesses & Surcharges’ out of the Total Gross Revenue, over the last decade.
Share of Cesses & Surcharges in ‘Gross Tax Revenue’ fell in the year GST was introduced only to increase sharply later
The total revenue generated through ‘Cesses & Surcharges’ during 2010-11 was Rs. 92.53 thousand crores, which was 11.1% of the total Gross Tax Revenue (GTR) collected that year.
In the ensuing years, there was not only an increase in the overall amount of cess & surcharge collections but also an increase in their share out of total GTR.
As per the audited figures for 2018-19, the total revenue through ‘Cesses & Surcharges’ was Rs. 4.13 lakh crores which was 19.9% of the GTR in that year. This amount includes GST compensation cess which is used to compensate states for GST revenue shortfall. Hence, we have excluded this from the volume of ‘Cesses & Surcharges’ collected since 2017-18. Accordingly, the total cess & surcharges proceeds for 2018-19, excluding GST compensation Cess was Rs. 3.18 lakh crores i.e., 15.3% of the GTR in the year. During the 10-year period 2011-12 to 2020-21, there was a fall in collection of ‘Cesses & Surcharges’ compared to the previous year only in 2017-18, the year when GST was introduced. The share of ‘Cesses & Surcharges’ in GTR (excluding GST) also fell to 10.6% in 207-18 from 13.5% in 2016-17. An earlier exception was in 2015-16, where the share fell to 12.2% from 13. 5% in previous year.
As highlighted in the earlier story, as per the revised estimates for 2019-20, the share of ‘Cesses & Surcharges’ is estimated to increase to 15.7%, while the budget estimates for 2020-21 forecasts them at 15.3% of GTR, as per the report submitted by XV Finance Commission.
Increase in Health & Education Cess on Income tax one of the reasons behind higher receipts
In its report, the XVFC quotes the concern raised earlier the XIVFC as well i.e., the problematic growth in the share of ‘Cesses & Surcharges’ in the GTR of the centre.  The XVFC report further highlights the specific nature of cess and the role of Central government as a custodian of funds until they are appropriated for the mandated purpose.
As highlighted in the earlier story, majority of the ‘Cesses & Surcharges’ were subsumed into GST. The XVFC report notes that the major ‘Cesses & Surcharges’ thus subsumed into GST include – Additional duty of Customs & Excise on Motor spirit & High-speed diesel oil, surcharge on Pan masala & Tobacco products, cess on sugar, clean environment cess and infrastructure cess.
In the first year of introduction, the GST compensation Cess collection was around Rs. 62.6 thousand crores i.e., 3.3% of the total GTR. In the subsequent year, this increased to around Rs. 95 thousand crores, and the share within GTR has also increased to 4.6%.
It ought to be noted that the GST compensation cess is used to compensate the loss of revenue to States on account of the introduction of GST.
The XVFC it its report observes that the increase in collection of ‘Cesses & Surcharges’ can be attributed to three specific ‘Cesses & Surcharges’
Apart from these factors influencing the increase in 2018-19, the share of ‘Cesses & Surcharges’ in total GTR in 2019-20 might also increase due to the following factors.
As could be seen here, the additional tax from high-income individuals is not in the form of a tax but is being collected as a surcharge. Therefore, the increased collection would not be a part of the divisible pool and hence states lose out on their share.  This substantiates the argument that the Centre is increasing its share of revenue through ‘Cesses & Surcharges’ to avoid the same being shared with the States.
CAG report highlights issues with accounting and usage of Cess & Surcharges
While the increase in the volume & share of ‘Cesses & Surcharges’ levied by the Centre is a concern, another important concern is about the utilization of the same.  As highlighted earlier, ‘Cesses & Surcharges’ are currently being excluded from the divisible pool due to a constitutional amendment. Prior to that, various commissions have excluded them from the divisible pool based on the argument that these are being collected for a specific purpose, and including them as part of the divisible pool could mean misutilization of the funds for unintended purposes by the states.
In its ‘Account of Union Government’ financial audit report for 2018-19, the Comptroller & Auditor General (CAG) makes certain important observations regarding the various ‘Cesses & Surcharges’ being collected and their utilization by the Central government.
The CAG further makes observations regarding the utilization of ‘Cesses & Surcharges’,
As rightly observed by the CAG, this short crediting is in violation of the tenets of GST Compensation Cess Act, 2017. Since it is retained in the ‘Consolidated Fund of India’ (CFI), it is available for the purpose not intended for, and the States also lose out on a share of the GST compensation Cess that they are entitled to.
The Ministry in its response stated that the amount not transferred thus would be transferred in the subsequent year.
These are few of the cesses where the collected amount has not yet been utilized for the intended purpose and continues to remain in the CFI.
As highlighted in this story, the following instances with regards to ‘Cesses & Surcharges’ are highlighted by multiple agencies.
All these raise important questions on the need to continue with the imposition of ‘Cesses & Surcharges’ by the centre and denying the States of much-needed funds.  As the Chairman of XVFC observed, there is a need for a larger discussion on the inclusion of ‘Cesses & Surcharges’ in divisible pool and make any constitutional amendment as needed.
Featured Image: Cesses & Surcharges in India


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Value of India’s Human Vaccine exports increased by more than 6 times in the last 10 years
Sai Krishna Muthyanolla
March 11, 2021
Export data available on the commerce ministry indicates that India’s vaccine exports have considerably increased starting 2010-11. Between 2010-11 and 2019-20, India’s human vaccine exports in rupee terms have increased from around Rs. 871 crores to Rs. 5723 crores.
In a recent tweet, India’s External Affairs Minister updated about the delivery of COVID-19 vaccines to Botswana. This is among a series of updates from the External Affairs Minister and the Ministry about India’s export of COVID-19 vaccine to many countries, including – Jamaica, Tajikistan, Belize, Guyana, Panama, Ethiopia, etc. to name among others. The government of India has termed this initiative ‘Vaccine Maitri’ and is being promoted as a diplomatic achievement.
Speaking at the Asia Economic Dialogue on 26 February 2021, the External Affairs Minister has stated that India is currently supplying the vaccine to 74 countries, of which 31 countries have already received the vaccine while the rest are in pipeline.
India’s potential in vaccine production and its capability of exports is also being attributed to the achievements of the current government by various sections.  As per the information provided by World Bank, India ranked 8th in the world in terms of the value of exports of ‘Vaccines for Human Medicine’ in 2019.
Is India’s favourable position in global exports of vaccines & its vaccine production capabilities a recent achievement as being projected? In this story, we take a detailed look at the data relating to India’s vaccine exports over the last 15 years and analyse the trends.
After a decline during 2016-18, India recorded a positive growth in 2018-19
As per the information available with the Department of Commerce’s Export Import Data Bank, during 2019-20, India has exported ‘Vaccines for Human Medicine’ (HS Code: 300220) worth Rs. 5.72 thousand crores to 177 countries. This is an increase of around 25% compared to the previous year i.e., 2018-19, where-in vaccines worth Rs. 4.55 thousand crores were exported. The exports in 2019-20 are the greatest value of exports of vaccines in a single year so far.
Even in terms of volume, the growth rate during 2019-20 is also the best in the recent past. In fact, India reported a fall in exports of vaccines by value terms during two successive years i.e., 2016-17 & 2017-18, only to recover starting 2018-19.  The fall in exports during 2016-18, is in contrast to the continuous growth in exports of vaccines since 2010-11, the year after which India’s vaccine exports really took off.  The year 2011-12 reported a record growth both in terms of value & volume.
As per the latest information available as of 10 March 2021, India has exported Rs. 4.02 thousand crores worth of vaccines in 2020-21, i.e., nearly 30% less than the previous year. However, with India expected to increase its supply of vaccines to other countries, this number could improve by the end of the year when accurate overall figures would be available.
India exports the highest value of human vaccines to countries like Nigeria, Brazil & Bangladesh
With the exception of two years (2014-15 & 2018-19), Nigeria is the country to which the highest value of human vaccines was exported by India during the 10-year period between 2010-11 and 2019-20. During those two years, Nigeria ranked 2 and 4 respectively in terms of the value of vaccine exports by India.
Data indicates that there has been a considerable increasing trend in India’s human vaccine exports from 2010-11. Even prior to that, Nigeria has been one of the countries to which the highest vaccine exports were made. In 2019-20, vaccine exports to Nigeria accounted for 10% of India’s total vaccine exports. However, its proportion has varied over the years.
In 2004-05, India was already exporting Human Vaccines to around 145 countries. In 2019-20, India exported to around 175 countries. The significant improvement observed especially after the turn of the previous decade (2010-11) has been in terms of the value than in terms of spread.
For a major part, the increase in the value of exports in the past decade has been with the countries to which India already had a higher value of exports.  However, over the years, there have been specific instances, when a higher volume of vaccines was exported in a particular year to a particular country in contrast to the general trend.
MMR & other Mixed Vaccine occupied the major share of the Human Vaccine exports from India
The export Category ‘Vaccines for Human Medicine’ (HS Code: 300220) is the broader export category under which all the vaccines which are related to human medicine are listed. The Export-Import data has further sub-categorization of the multiple vaccines that India exports.
Among the sub-categorization provided in the data, the greatest export value of vaccines is under ‘Other Mixed Vaccine’.  This is followed by ‘Mixed Vaccine for MMR’ which has the second-highest export value.
Among the single vaccines, the highest export value is of the ‘Vaccine for Polio’. Over the years, the export value of the single vaccine for – ‘Cholera & Typhoid’, ‘TB’, ‘Hepatitis-B’ has increased.
Overall, India’s vaccine exports data shows that a major portion of the exports is under the category of ‘Other Mixed Vaccine’. However, when we analyse the data for the specific vaccines, ‘Vaccine for Polio’, ‘Cholera & typhoid’ are among the most exported ones to various countries including African & Asian countries such as Bangladesh, Pakistan, etc.
India relies on API imports for production of Vaccines
As the data indicates, India has managed to increase the value of vaccine exports to various countries over the last 10-years. This points to an increase in the domestic manufacturing capability to meet the global demand. Further, as highlighted earlier, the Indian government is leveraging the country’s vaccine manufacturing capabilities to produce and export vaccines for COVID-19 to other countries to improve its global standing.
However, some of the vaccines that are being produced here are not indigenously developed and India is more of a manufacturing hub, like in the case of Covishield being manufactured by the Serum Institute.
In spite of India’s increased prowess in vaccine manufacturing, the lack of indigenously developed vaccines is being highlighted as one of the challenges for the industry in the future. Another challenge is the reliance on imports for raw materials. In an earlier story, we have highlighted India’s overreliance on imports of Active Pharmaceutical Ingredients (API).
Over the past decade or more, India made great strides in developing into a major hub for manufacturing and exporting vaccines & pharma products. The government needs to focus on investing in research to develop indigenous vaccines. At the same time, it needs to encourage domestic manufacturing of raw materials to reduce the reliance on imports.  The recent ‘Production-Linked Incentive (PLI) Scheme’ announced by the government for the 10 key sectors including pharma is the right step in this direction.
Featured Image: India’s Vaccine exports


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Data: Vehicle Registrations down 17% even during the Festival season
Sai Krishna Muthyanolla
November 16, 2020
The data on vehicle registrations from the Vahan dashboard of the MoRTH indicates that the number of registrations in September & October 2020 is down by almost 17% compared to the same period in 2019. Even the registration data for November 2020 doesn’t look promising. Here is a detailed analysis of the vehicle sales data to understand the impact of the economic downturn.
As of 2019, India was the world’s fourth largest manufacturer of cars and seventh largest manufacturer of commercial vehicles. The automobile industry, both sales and component manufacturing, is an important sector as it accounts for 7.1% of India’s GDP and also accounts for a significant share of the manufacturing GDP. The industry also generates employment for over 3.5 crore persons. Furthermore, automobile sales are an important source of taxation for the government. The sector also attracts a large share of FDI.
A total revenue of more than Rs. 50,536 crores were accrued to the Central & State governments through various taxes & cess in 2019 alone. However,  the sector was already witnessing a downturn in 2019 and the COVID-19 pandemic further exacerbated the situation as the lockdown resulted in a halt in production as well as sales. Here is a detailed look at the sales numbers of 2020 compared to the same months in 2019.
Different sets of data available with the Industry Associations & the government
Different sets of data are available with the Industry Associations & the Government that provide us with numbers relating to various parameters. Here is a basic understanding of these datasets.
Domestic Sales data of SIAM: Data on domestic sales is released by the Society of Indian Automobile Manufacturers, abbreviated as SIAM. This data is also provided by the government in the Lok Sabha. It has to be noted that the numbers pertaining to domestic sales, as released by SIAM, refer to the number of vehicles that have been dispatched by the manufacturing companies to dealers. This data does not indicate the level of retail sales i.e., vehicles bought by consumers.
Vehicle Registrations data on VAHAN: The registrations data is readily available in the Vahan dashboard, maintained by the Ministry of Road Transport & Highways (MoRTH). Vahan dashboard is a centralized database of vehicles in 33 out of 37 states/UTs which are enrolled in Vahan 4.0. The figures from Andhra Pradesh, Telangana, Lakshadweep, and Madhya Pradesh are not included here. The figures pertain to that from 1257 RTOs of the total 1464 RTOs in the country. VAHAN data is a more than reliable estimate of the vehicle registrations and hence a good indicator of retail sales, as registrations take place only after the sale to the consumer.
Registration Data by type of Vehicles by FADA: The data on vehicle registrations released by the Federation of Automobile Dealers Associations (FADA) in collaboration with MoRTH is also based on Vahan data. This gives numbers related to registration by vehicle type. These figures also pertain to 1257 RTOs of the total 1464 RTOs in the country in 33 of the 37 States/UTs.
SIAM data reveals that domestic sales have increased since May 2020
According to the data on domestic sales of Society of Indian Automobile Manufacturers, abbreviated as SIAM, presented in the Lok Sabha, prior to lockdown, the domestic sales of passenger vehicles dropped by 44% in March 2020 as compared to February 2020. In April 2020, the sale was recorded as zero. Since then, there has been an increase in the numbers. Month on month comparison reveals that the sales of domestic vehicles has been increasing since May 2020, as per SIAM.
Meanwhile, the year on year comparison shows that in the months of January, February, and March 2020, there had been a contraction in sales compared to corresponding months in 2019. In March 2020, the sales had dropped by 51.7% compared to March 2019. In May 2020, the sales had dropped by 85% compared to 2019. A positive growth of 14.2% compared to 2019 was recorded in the month of August for the first time in 2020. In September 2020, a growth of 26.45% was recorded while in October, this was 14.19%.
SIAM data indicates the number of vehicles dispatched to dealers
The relatively positive growth in domestic sales of passenger vehicles and commercial vehicles in the last few months might make one to assume that the automobiles sector is recovering. This assumption is backed with explanations such as the preference of people to commute by private vehicles instead of public transport to avoid risk of infection. But, as explained earlier, the numbers pertaining to domestic sales, as released by SIAM, refer to the number of vehicles that have been dispatched by the manufacturing companies to dealers and do not indicate the level of retail sales to consumers.
This means that the data under ‘domestic sales’ does not actually refer to sales but to the number of vehicles which have been handed over to dealers to stock inventory which is then sold to customers. Every vehicle that is dispatched to the dealer need not get sold in the same month. Following the Supreme Court’s order to sell vehicles complying to BS-VI norms from April 2020, automobile dealers have been forced to stock up the new BS-VI compliant vehicles which may be the one of the reasons behind the increasing domestic sales as seen above. Moreover, dealers usually stock up vehicles for the festive season that fall in the months of September to November, when the sales usually increase. All these could have resulted in an increase in domestic sales.
Domestic sales of Commercial Vehicles fell by 85% in Q1 of FY20
In the case of commercial vehicles, data is provided by SIAM on a quarterly basis for 2020. Even before the pandemic struck India, in the quarter from January to March of 2020, domestic sales of commercial vehicles recorded a drop in sales by over 48.3%. For the quarter from April to June 2020, the sales had fallen by almost 85% whereas for the quarter from July to September 2020, the drop in sales is 20%. Meanwhile, on a quarterly basis, the sales had dropped by 78% in the quarter ending June as compared to quarter ending March 2020 while the sales went up by over three times in quarter ending September 2020 compared to the preceding quarter. The data indicates that even the dealer inventory hasn’t picked up to the levels of 2019 in the case of commercial vehicles unlike in the case of passenger vehicles.
Vehicle Registrations data is a more reliable estimate of Retail Sales
Like explained earlier in this story, the vehicle registration data from the Vahan portal is a more reliable estimate of retail sales since the registration takes place only after the sale to a consumer.  This data is readily available in the Vahan dashboard. It has to be noted that the data pertains to 33 of the 37 States/UTs.
Retail Sales have improved, but not yet back to pre-lockdown levels
As per the data available on the Vahan dashboard, the total number of vehicles registered crossed the 20 lakh mark in March 2020, only for the second time between January 2019 and October 2020. The first was in November 2019 when this number touched 22.73 lakh. The number of vehicles registered in March 2020 was about 23.2 lakh, the highest monthly registrations since 2016. In 2019, the total number of registrations had recorded a negative growth of 5.52% indicating the downturn in the industry. Though the number of registrations has been continuously increasing since June 2020, the figures are nowhere near the 2019 levels.
Compared to the corresponding months in 2019, the number of vehicle registrations had gone down by more than 78% in April 2020 and 88% in May. In the months of June, July, and August 2020, the registrations were down by 41%, 35%, and 25.4% respectively compared to the same months in 2019. In the month of September 2020, the registrations were only 8.4% less than 2019. However, in October 2020, the registrations were again down by 23% compared to the 2019 figures.
Festival season is when most sales happen
Usually, the retail sales of vehicles are higher during the festive season in the period between September to November, as this period is considered auspicious by many. If the data for September & October together is compared, then the retail sales numbers are down by 16.6% in 2020 compared to 2019.
The data from the Vahan dashboard reveals that the registration of vehicles is the highest in the month of November every year. Whether the automobile retail sales will improve and return to the earlier levels will be known when the data for November 2020 is released.
Number of Tractors registered has increased manifold
The data on vehicle registrations released by the Federation of Automobile Dealers Associations (FADA) in collaboration with MoRTH is based on Vahan data. According to FADA, throughout the months from July to October 2020, there has been a drop in the sale of two wheelers, three wheelers, and commercial vehicles compared to the same months in 2019. The sale of all passenger vehicles witnessed a positive growth only once, that too by 9.8% in September 2020 compared to September 2019. The growth in the sale of passenger vehicles was negative in the rest of the months. The reduction in three-wheeler registrations has been above 50% throughout the four months.
The sales of only one type of vehicles, Tractors, had witnessed a consistent and positive growth in these four months. The number of tractors getting registered increased by 37.2% in July 2020, 27.8% in August, 80% in September, and 55.5% in October 2020 compared to the same months in 2019.  The possible reason behind the increasing number of tractors could be the increased agricultural activity on account of a good monsoon as well as reverse migration that took place during the lockdown.
More people are transferring ownership of Vehicle
The Vahan data also indicates that number of incidences of ownership transfer has increased from around 4.93 lakhs in June 2020 to 7.53 lakhs in September 2020. The Year on Year (YoY) comparison also indicates an increase in the number of such transfers by almost 24% in September 2020 and 17.58% in October 2020, compared to the same months in 2019. Transfer of ownership may be representative of the sale of used vehicles. In other words, the sale of used vehicles could have increased either because of the propensity to travel in private vehicles or because of distress sale.
In a recent media release, FADA has highlighted a few issues that the dealers may face in the coming months. One is the hindrance in procuring spare parts from Europe due to the second wave of infections & increased lockdown measures. This may result in a supply demand mismatch and would affect the sale of passenger vehicles. Secondly, post festival, the demand might reduce and hence, the dealers must keep an eye on the inventory levels. The dealers’ financial health may be affected due to this, as per FADA.
New and innovative techniques for sale must be adopted
According to a study by KPMG, for the automobile industry to recover, it is necessary that they adopt to new measures and changed preferences of people. First, though there may be an increase in number of people opting for private transportation, the ability of people to afford and buy amidst such pressing times must be considered. Thus, innovative purchasing schemes are necessary. Secondly, more people are opting for digital transactions and online shopping. Hence, offering services at doorstep like booking, finance and delivery through contactless transfer will be useful. New and innovative online marketing techniques may be useful since people spend most of their day online. Similarly, new innovative features such as anti-bacterial surfaces might be a hit.
Like many other sectors, the automobile sector is also badly hit because of the pandemic. It remains to be seen if the recovery takes more than a year or so.
Featured Image: Vehicle Registrations

created: November 16, 2020


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‘Very Heavy Rainfall’ events increase by more than 70% in the last 3 years
Sai Krishna Muthyanolla
October 20, 2020
The recent extremely heavy rainfall in Hyderabad resulted in loss of life & property. Government data indicates that the events of ‘very heavy’ & ‘extremely heavy’ rainfall events increased by more than 70% in the last 3 years. The number of cyclone events has also increased during this period.
Recently, the city of Hyderabad received extremely heavy rainfall within a week resulting in flooding in many parts of the city. Extreme precipitation events are on the rise in India which is one of the most flood prone countries in the world after. This year alone, floods have severely affected various parts of  the country, be it the Northern plains, coastal states, north eastern states, and even central India. Though flooding is natural and necessary for certain natural processes such as groundwater recharge and replenishment of water bodies – torrential rains, storms, and flash floods have resulted in significant loss to life and property due to the erratic occurrence of the events.
Nearly 1/5 of the global deaths due to floods are reported from India. Further, about 40 million hectares in the country, or one-eighth of the country’s geographical area is also prone to flooding as per the estimates of National Flood Commission in 1980. The Working Group Report on Flood Management and Region Specific Issues for the XII Plan re-estimated the area liable to flooding to 49.8 million hectares by considering the maximum area affected by floods in any year during 1953-2010. Andhra Pradesh had the most affected area of over 9 million hectares followed by Uttar Pradesh with 7.3 million hectares.
1503 lives lost in floods up to 10 September 2020
According to the Ministry of Home Affairs, floods, and heavy rains during the south west monsoon this year have claimed over 1503 lives as of 10 September 2020. In addition to this, over 7842 cattle were lost, and more than 2.75 lakh households were damaged. Crops in 20.75 lakh hectares were also devastated by the rains. West Bengal reported the greatest number of deaths, while the houses damaged in Odisha was the highest. The NCRB data reveals that between 1990 and 2019, during the span of 20 years, as many as 22,959 persons reportedly lost their lives to floods. This number has been on the rise since 2017. Another 12,043 lost their lives in cyclones and tornadoes. Thus, on an average, around 1,750 persons die every year due to cyclones and floods in India.
Frequency of cyclones and heavy rainfall events has increased in the recent past
Between 1891 and 2017, as per the data available with Ministry of Earth Sciences, an average of five cyclones developed over the North Indian Ocean in a year- four over the Bay of Bengal and one over Arabian Sea. However, the frequency has increased in the last two years. The total number of cyclones was 3 in 2017, which increased 7 in 2018 and 8 in 2019. Frequency of cyclones over the Arabian Sea has increased from 1 in 2017 to 5 in 2019, the highest annual cyclone frequency over the Arabian Sea since 1902. Not only has the frequency increased but the number of severe cyclones has also gone up in the last two years.
During the same period, it is observed that the number of stations which reported very heavy rainfall has increased by 67.5% while the number reporting extremely heavy rainfall has more than doubled, increasing by 112%. In simpler terms, there has been a steady increase in the number of very heavy & extremely rainfall events in the last 3 years.
Such increase in these heavy rainfall events calls for an effective flood management system in the country as floods turn more unpredictable and severe. Multiple agencies are involved in flood control and management in India.
Flood Management Programme provides financial assistance to states
The Flood Management Programme under the Ministry of Water Resources was launched by the Central government during the XI five year plan under which flood prone states are provided with financial assistance for flood management activities and anti-erosion works. The programme had a budget outlay of Rs. 10,000 crores during the XII plan and has been extended up to March 2021 as a component under Flood Management and Border Areas Programme (FMBAP). Between 2017-18 and 2019-20 a total of Rs. 2022.22 crores have been released to 11 states under the scheme. About 23% of these funds were released to Assam and another 21% was released to Himachal Pradesh.
The Central Water Commission (CWC) has established a flood forecasting network across the country and issues flood forecasts at 328 locations (198 Level Forecast for Villages/Town on the bank of the rivers and 130 Inflow Forecast Stations for Dams and Barrages) in various parts of the country. CWC collects hydrological and meteorological data based on which alerts are sent to states for taking adequate mitigation measures. Similarly, the Indian Meteorological Department also provides forecasts for cyclones and rainfall.
The State governments have the primary responsibility of disaster response and management. State Disaster Management Authorities consisting of the Chief Minister as the chairperson draws up the state disaster management plans and is responsible for the implementation of the plan.  The state governments will have to assess losses and provide relief measures according to the severity of the ground situation through the State Disaster Response Fund.
Disaster management fund of Rs.11000 crores has been released by the Centre
For the year 2020-21, the Centre has already released its share of Disaster Management Fund of Rs.11,565.92 Crore, in advance, to all the State Governments to fight COVID.  Further assistance is provided by the National Disaster Response Fund if the calamity is severe. At the national level, the National Disaster Management Authority under the Prime Minister’s Office is responsible for the execution of the plans.  Relief and rescue measures are implemented by the National Disaster Response Force.
Despite the presence of response teams and agencies at different levels to manage floods in the country, inefficacies at various levels still hinder flood management in the country. Regular assessments and evaluation of flood situation using the latest scientific technology is necessary since the situation is becoming unpredictable with every passing year. The estimate by the Central Water Commission on flooding area was carried out decades ago and the scenario has changed considerably since then. Impact of climate change and sea level rise must also be factored into these models.
A more common phenomenon as seen in metros like Delhi, Mumbai, Kolkata, Chennai & Hyderabad is the lack of sustainable urban planning leading to heavy flooding that results in severe loss of life & property. These issues get discussed only when there is a severe flood and go to the back burner after that. Encroachments of natural water bodies, unplanned expansion of these mega cities make the situation worse. The recent deluge in Hyderabad due to incessant overnight rains, has once highlighted these issues. One only hopes that these issues get the required attention of policy makers for a sustainable solution.
Featured Image: Very Heavy Rainfall

created: October 20, 2020


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Data: Volume of Cheque Payments down post COVID-19, Increasingly used for high-value transactions - FACTLY
Sai Krishna Muthyanolla
December 4, 2023
Multiple countries around the world have phased out cheque payments as newer modes of digital payment emerged. While India has not phased out cheque payments, data indicates that the volume of cheques used for payments has decreased significantly post COVID-19. They are increasingly used for high value transactions.
Cheques, once a widely prevalent method of payment worldwide, have experienced a decline in usage in many countries due to the emergence of digital payment methods and other instruments such as debit and credit cards. Moreover, customers now prefer such convenient and faster modes of payment. Several countries have either completely phased out or significantly reduced the usage of cheques due to the same. However, their status and usage vary significantly by region and country.
For instance, the Monetary Authority of Singapore announced that all corporate cheques will be eliminated by end-2025 while individuals will still be able to use cheques for a period after 2025. This move was announced following the decline in cheque transaction volume by almost 70% from 61 million in 2016 to less than 19 million in 2022. Likewise, in Australia, cheques that once accounted for 85% of the number of non-cash payments in 1980 and almost all their value, will be phased out by 2030. According to a 2023 Australian government report, the country witnessed a 90% decrease in cheque usage over the past decade with cheques comprising only 0.2% of non-cash retail payments. Meanwhile, its neighbour, the New Zealand government made a strategic decision to end the use of cheques by the end of 2021.
Countries are phasing out cheques following steep decline in its usage
In the European Union, following the deployment of the giro system, the usage of cheques became rare. Finland ceased cheque usage in 1993, while Dutch banks stopped accepting cheques in 2001, both within the giro system. Denmark significantly reduced cheque practices by 2017, aligning with the broader trend toward electronic payment methods in the Nordic states.
According to a recent report from the Federal Reserve Bank of Atlanta that studied the use of cheques in 20 countries for the period from 2012 to 2021, the United States had the highest share of cheque volume in total volume of cashless payments with 5.1% in 2021. It was followed by France and Canada with 4.1% in 2021. The share in Mexico, India, Italy, and Argentina was between 0.9 to 1.6%. However, in 2012, the same share was as high as 44.4% in India and 17.4% in the US. In terms of the value of cheques, the share in the US dropped from 35.1% to 19.6% while in India, the same dropped from 74.6% in 2012 to 13.3% in 2021.
Reserve Bank of India’s analysis observed that cheque-based payment transactions in India declined at a CAGR of 15.4% from 2017 to 2020. Most of the countries considered in the report were close to eliminating the use of cheques, with Germany, Korea, Saudi Arabia, South Africa, and the United Kingdom most successful in reducing the usage of cheques.
Volume of CTS transaction grew by 7.7% in 2022-23
The Reserve Bank of India introduced the Cheque Truncation System (CTS) to modernize and streamline the cheque-clearing process in India. CTS makes cheque clearance faster and more efficient by replacing the physical movement of cheques, with the transfer of an electronic image of the cheque for clearing.
In contrast to the above-discussed trends, a response in the Parliament revealed that in 2021-22, the total volume of cheques through Cheque Truncation System (CTS) in India grew by 0.4%, and in 2022-23, it grew by 7.7%. In numbers, the volume of transactions involving cheques grew from 6,570.84 lakhs in 2020-21 to 7,109.27 lakhs in 2022-23. For a deeper understanding of the trends, we look at the monthly CTS transactions in the country and compare them with those of other widely used digital transaction modes. For the same, the following data has been used for analysis from Dataful:
Volume of CTS transactions dropped because of pandemic
The volume of transactions through CTS was 559.9 lakhs in October 2023. For the period from June 2020 to October 2023, the average monthly volume of transactions through CTS was 590.5 lakhs. The highest volume of transactions through this mode was recorded in March 2021 with about 806.6 lakh transactions which dropped to 366.6 lakh transactions, the lowest in this period, in May 2021. It can be observed that the volume of transactions through CTS had grown until the second wave of the COVID-19 pandemic, following which it dropped sharply. Since July 2021, the volume has stayed between 500 to 600 lakhs, except for the spikes in March 2022 and March 2023. The sudden spikes in March may be attributed to the year-end financial activities, tax-related transactions, or quarterly settlements.
Volume of transactions using debit cards have dropped by 44% in 3 years
The volume of transactions through debit cards has dropped considerably by about 44% between November 2020 and October 2023. However, the volume was still almost twice that of CTS transactions. On the other hand, the volume of transactions through credit cards, IMPS, NEFT, RTGS, and UPI has grown sharply. The volume of UPI transactions increased 8.5 times from 13,369 lakh transactions in June 2020 to 1,14,088 lakh transactions in October 2023. Among the 6 popular modes of transactions considered here, the volume of CTS transactions was higher than that of only RTGS.
CTS is being used for large transactions
Except in the cases of NEFT and RTGS, the trends in the total monthly value of transactions through each of the payment modes are more or less similar. The value of CTS transactions was about 5.84 lakh crore rupees in October 2023, up from 3.85 lakh crore rupees in June 2020. The monthly average value of transactions through CTS stood at 5.64 lakh crores rupees during this period. When this increase in the value of transactions is read with the decrease in the volume of CTS transactions, it is clear that Cheques are increasingly being used for high-value payments, such as settlements, large purchases, or transactions involving substantial sums of money. The value of transactions through CTS is much higher than that through credit cards, debit cards, and IMPS. While CTS is efficient, it might not be as immediate as RTGS or NEFT which are used typically for large transactions.
Volume of CTS transactions is highest in Western Grid
CTS centralizes cheque processing across India into three main grids located in New Delhi (North), Chennai (South), and Mumbai (West), with each grid offering processing and clearing services to all banks falling within its jurisdiction. These were introduced in 2008, 2011, and 2013, respectively. The jurisdictions of these grids are as follows:
The data for the southern grid has been available since April 2012, for the western grid since April 2013, and for the northern grid since December 2013.
The trend in the volume of transactions in each of these grids is similar- a slow rise until 2014, stable until 2020, and then a fall. Across these grids, the average monthly volume of transactions is the highest in the Western Grid followed by the Southern Grid.
Value of transactions is also higher in Western Grid
Unlike in the case of volume, the value of CTS transactions across grids has not declined significantly post the fall during the two waves of the pandemic. The average value of transactions was 1.67 lakh crore rupees in the northern grid, 1.81 lakh crore rupees in the southern grid, and 2.26 lakh crore rupees in the western Grid.
India should be mindful of the concerns while promoting cashless economy
As the world is shifting to digital payments, the volume of paper-based transactions is declining across jurisdictions. The majority of the benchmarked countries are close to eliminating the use of cheques. The share of cheque payments in total payment systems transactions has also reduced over the years. In India as well, while cheques remain a relevant form of payment in India, their usage in terms of volume is gradually decreasing as the country moves towards a more digital and cashless economy. As the government promotes a cashless economy, and if India plans to phase out the cheque system in the future, it should be mindful of the challenges and concerns.

created: December 4, 2023


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Data: Volume of Digital transactions fell during the lockdown & recovered later in 2020
Sai Krishna Muthyanolla
January 21, 2021
The volume of digital transactions through all modes (UPI, IMPS, NEFT, etc.) fell during March & April 2020, the initial months of the lockdown. However, digital transactions recovered strongly during the later months and continued the increasing trend. Unlike digital transactions, the ‘Currency in Circulation’ witnessed an increasing trend throughout 2020.
In an earlier story, we had observed the increase in Currency Circulation during and post COVID-19 induced lockdown in the country. Lockdown and social distancing measures prevent people from venturing out to carry out various transactions. Hence, it is estimated that people would have preferred using digital platforms to carry out various transactions instead of cash. However, we found that ‘Currency in Circulation’ increased by over 22% in 2020.
What about digital transactions then?
One of the key purposes of demonetization, as stated by the government was to build a less-cash society and encourage people to use digital platforms. In an earlier story, it was observed that there is a substantial increase in the volume of digital transactions over the years. It was also observed that due to lockdown, there was a fall in the digital transactions during April 2020.  Did these trends continue or was there a change post-April 2020? Have digital transactions increase on par with currency circulation? We look at the trends in the volume & value of digital transactions in this story.
75% increase in the volume of UPI transactions in 2020 compared to previous year
As per the information available on the National Payments Corporation of India (NPCI) website, more than 1880 crore UPI transactions were made in the year 2020 which is 75% more than the 1079 crore UPI transactions in 2019. While the rate of growth in 2020 was less than the previous years, it could be because of the low base effect in the previous years. During 2018, the volume of UPI transactions grew by nearly 9 times while in 2019, the transactions grew by nearly 3 times compared to 2018.
In terms of the value of the UPI transactions, Rs. 33.87 lakh crores worth of transactions were made in 2020. This is around 85% more than the value of the transactions in 2019. The per transaction value has also increased in 2020 in line with the trend of previous years. The average per transaction value in 2020 is Rs. 1794, more than Rs. 1702 in 2019. This shows that people are increasingly using UPI for high-value transactions also.
Despite a fall in March & April 2020, volume of UPI transactions has increased
A consistent increasing trend was observed both in the volume & value of UPI transactions since 2017. This increasing trend was broken in March 2020, when both the volume & value of the UPI transactions were less than February’2020. These fell further in April 2020. This was the initial period of lockdown, and the same was highlighted in an earlier story. The trend was reversed in May 2020 and since then, there has again been a consistent increase in both the volume & value of UPI transactions. The fall in these two months was compensated by the spurt of increase in later months, evident from the higher annual figures reported earlier in this story. Further, it has to be noted that even though there was a decline in March & April 2020, the UPI transactions during these months are still higher than the transactions during the same months in 2019.
After a fall during lockdown, IMPS transactions recovered in the latter part of 2020
A total of around 297 crore IMPS transactions were made during 2020 with a value of around Rs. 26.83 lakh crores, as per the information available on the NPCI website. This is an increase compared to the IMPS transactions in 2019.
The Year-on-Year (YoY) increase is not a reflection of the varying trend observed during 2020. As was the case with UPI, the trend of a monthly increase in the IMPS transactions observed in recent years was broken in February 2020. The number of transactions further declined in the ensuing two months of March & April 2020. Like in the case of UPI, May 2020 marked the reversal of this decreasing trend. However, it was only in September 2020 that the volume of IMPS transactions reached the pre-lockdown levels.
The growth in the IMPS transactions has been higher in the latter months of 2020, making up for the decreased transactions earlier in the year and contributing to an overall higher annual volume and value of IMPS transactions compared to 2019. December 2020 recorded the greatest IMPS transactions both in terms of volume and value.
Highest volume of NEFT transactions recorded in last quarter of 2020, following a fall during lockdown
As per the information provided by RBI, around 294.63 crore NEFT transactions with a value of Rs. 238.49 lakh crores were made in 2020 while in 2019, a total of 262.17 crore NEFT transactions worth Rs.232.96 crores were made.
Compared to UPI and IMPS transactions, the growth of NEFT transactions in 2020 has been less prominent. Trends over the last year indicate that the NEFT transactions had a fluctuating trajectory, unlike IMPS & UPI transactions. Post the lockdown, there was a fall in NEFT transactions in April 2020, the least during the two-year period of 2019 & 2020. Although the recovery began from May’2020, it has been slow and it was only during the last quarter of 2020 that the NEFT transactions reached pre-lockdown levels, with the last three months recording the highest volume of transactions.
Unlike currency in circulation, Digital transactions fell during lockdown only to recover later.
As already highlighted in the story, digital transactions through various modes i.e., UPI, IMPS & NEFT have recorded stronger growth during the latter half of 2020 i.e., post the lockdown. However, unlike Currency in Circulation (CiC), which recorded a growth even during the lockdown, the transactions across all digital modes fell during the lockdown period.
Significantly fewer digital transactions during the lockdown could be a reflection of the lower levels of economic activity during the lockdown period, meaning fewer transactions. This could also reflect the disinclination to spend during the uncertainty because of the pandemic. On the other hand, the increase in CiC could be reflective of the apprehensions among the public and holding onto cash as a safe backup.
The increase in the volume and value of digital transactions post the lockdown point towards an increase in the preference for digital transactions. The growth in digital transactions in-spite of a contracting economy points towards a change in preference rather than a corresponding increase in economic activity.

created: January 21, 2021


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Volume & Value of Digital Transactions significantly affected by lockdown
Sai Krishna Muthyanolla
June 17, 2021
After the advent of IMPS & UPI, the volume of digital transactions has significantly increased in the country and continues to grow. However, the pandemic-induced lockdowns and changing spending patterns seem to have had an impact on digital transactions. Both the volume & value of digital transactions are significantly affected by lockdown measures, as per the latest available government data.
People’s spending patterns have changed during the COVID-19 pandemic. Globally, there has been an increase in household saving rate during the second quarter of 2020 following the pandemic’s vicious toll on economies. Not just that, the pandemic has had a major impact on consumption levels and inequality within India. According to a recent study, the bottom 40% of households had experienced the most severe decline in consumption in the early phase of the pandemic. However, with time, as COVID-19 intensified, consumption declined across all classes of households, especially the middle class. That is, the impact of the pandemic was severe both for the middle class as well as the poor.
What has been the impact of Lockdown measures?
In one of our earlier stories based on RBI’s annual report, it was observed currency in circulation has more than doubled in the last five years despite an increase in digital transactions. According to RBI, in the year 2020-21, a higher-than-average increase in banknotes in circulation was observed due to precautionary holding of cash by the public because of the pandemic and its prolonged continuance. Restricted mobility due to lockdowns and the need to reduce physical contact to avoid infection could have encouraged more people into resorting to online platforms for financial transactions instead of cash. At the same time, severe lockdowns may have had an impact on digital transactions as most businesses except the essential ones were completely shut down. In other words, the lockdown measures while pushing people to hoard more cash also may have impacted digital transactions. We analyse the data on various types of digital transactions to understand if the volume of transactions has grown or shrunk during the lockdown months.
Even prior to that, the BJP led NDA government launched the Digital India campaign in July 2015 with the motive, ‘Faceless, Paperless, Cashless’.  The promotion of cashless transactions and conversion of India into a less-cash society was an important goal of the program. In fact, one of the objectives of the demonetization exercise in November 2016 was to build a less-cash society and encourage people to use digital platforms.
The RBI Ombudsman Scheme for Digital Transactions (2019) defines digital transactions as “a payment transaction in a seamless system effected without the need for cash at least in one of the two legs, if not in both. This includes transactions made through digital/electronic modes wherein both the originator and the beneficiary use digital/electronic medium to send or receive money.” AePS, BHIM UPI, Credit and Debit Cards, IMPS, Internet Banking, Mobile Banking, NACH, NEFT, NETC, PPI, and RTGS are some of the popularly used modes of digital transactions in India.
Digital transactions have increased significantly over the last few years
There has been a substantial increase in the volume of digital transactions over the last few years. Data from the Digidhan dashboard developed by the Ministry of Electronics & Information Technology  (MEITY) and a Rajya Sabha response from March 2021 shows that the total volume of digital transactions has increased from 1004 crores in 2016-17 to 5554.2 crores in 2020-21, registering a more than five-fold increase in five years. The volume is further expected to grow in 2021-22 if the trend holds. As of 15 June 2021, the total volume of transactions for about 2 and half months in 2021-22 has crossed 1160 crores. At this rate, it might just surpass the volume of transactions in 2020-21. The volume doubled between 2016-17 & 2017-18 which could be because of the demonetization, announced in late 2016.
Volume of transactions fell in April and May of both 2020 & 2021
It was during March 2020 that states started imposing lockdowns for curbing the first wave of COVID-19. The central government’s strict lockdown began on 25 March 2020 and continued till May 2020 following which relaxation of restrictions began. Similarly, in 2021, most state governments announced lockdowns in the months of April and May for controlling the more infectious second wave. The impact of these lockdown measures is clearly visible on the volume of digital transactions. In both 2020 & 2021, the volume of digital transactions reduced in the months of April & May compared to the month of March, as many businesses were shut because of the lockdown. The increased preference for digital transactions because of restricted mobility could not compensate for the loss of digital transactions arising out of the closure of businesses.
In 2020, it is observed that the transactions fell by nearly 37% in April as compared to March. The volume of transactions in May 2020 was still less than that of March 2020, but slightly more than April 2020 by about 7.5%.
This decreasing trend continued even in 2021. In 2021, while the month of March had registered a record 651 crore transactions, the volume of transactions dropped by 9.6% in April and further down by 14.5% in May. Besides the closure of businesses, reduced spending across classes could be another reason for this decrease in digital transactions.
Month on month comparison (M-O-M) of the volume of transactions reveals the change in volume in a particular month, in different years. For each of the months, the highest volume of transactions has been recorded in 2021 compared to previous years. While the volume of transactions has steadily increased in the months of March & May over the years, the volume of transactions in April 2020 reduced by 5% compared to April 2019. However, the volume of transactions in April 2021 was 94% more than in April 2020.
UPI transactions fell in April and May 2021, but not to the pre-lockdown levels
The Unified Payments Interface (UPI) is among the most popular payment systems being used nowadays. UPI is a mobile-based fast payment system under which bank details need not be shared with the remitter. Introduced in 2016, UPI enables money transfer with persons, merchants, utility bill payments, and QR code-based payments.
As per the information available on the National Payments Corporation of India (NPCI) website, UPI started gaining steam in 2017 and since then, a consistently increasing trend was observed both in the volume and value of UPI transactions. However, the trend was disrupted in March and April 2020 during the nationwide lockdown, when the volume and value of UPI transactions declined as opposed to the increasing trend. In June 2020, it reached the pre-lockdown levels and then continued to increase in the ensuing months. It should be noted that though there was a negative growth in March & April 2020,  the volume of UPI transactions during these months in 2020 was still higher than the volume during the same months in 2019.
The period from May 2020 to March 2021 witnessed the highest growth in UPI transactions. While the volume of UPI transactions more than doubled, the value increased 2.25 times in the ten-month period. The volume and value of UPI transactions touched an all-time high in March 2021, following a marginal drop in February 2021. However, in April and May 2021, there has been a reduction in the volume of UPI transactions by 3.3% and 3.8% respectively. The value went down by 2.2% in April and 0.6% in May 2021.
IMPS transactions have dropped to 2020 levels despite record transactions in March 2021
UPI and IMPS are the two fast payment systems existing in India. In 2010, India became the fourth country to introduce IMPS with an Rs. 2 lakh limit. Even non-bank entities can participate in these payments.
Like the trend observed in UPI transactions, the value and volume of IMPS transactions witnessed a continuous growth since 2014. However, the trend was disrupted in February 2020. The volume and value of transactions continued to drop in March 2020 and went further down in April 2020. Since May 2020, though the trend was reversed, the pre-lockdown levels were reached only in September 2020. Between May and December 2020, there has been a significant growth both in terms of volume and value of IMPS transactions compared to previous years. In January and February 2021, the volume of transactions dropped by 2.5% and 8% respectively to again touch an all-time high in March 2021. Since then, both volume and value of transactions dropped in April and reduced further in May 2021. The volume of IMPS transactions in May 2021 dropped to September 2020 levels.
Value of NEFT transactions in May 2021 lowest in 12 months
NEFT is used in transferring funds from one bank account to another without any ceiling on the amount that can be transferred in a single transaction. However, the clearance of these transactions takes place in half-hourly batches and hence the transfer is not real-time as in the case of UPI & IMPS. NEFT is mostly used for higher-value transactions.
As per the data released by RBI, the trend with respect to NEFT transactions is wavering and there is no significant growth, in contrast to the trend in UPI and IMPS transactions. Nonetheless, it is evident that the volume of transactions was the lowest in April 2020 in about 15 months.  From May 2020, the volume and value of transactions began increasing until December 2020. In 2021, the volume of transactions touched an all-time high of 34.8 crores which were worth Rs. 30.4 lakh crores. However, soon after, both the volume & value of transactions reduced significantly in April and May 2021. In May 2021, there were only 25.7 crore NEFT transactions worth Rs. 18.2 lakh crores. The value of NEFT transactions in May 2021 is the lowest in 12 months.
People’s spending patterns have changed due to pandemic
Until the second wave occurred, there was a steady growth in digital transactions though the economy was contracting which indicated a change in preference of payment systems. But the second wave of the pandemic has significantly affected the consumption and spending patterns of people. The reduced value and volume of transactions during the pandemic-induced lockdown in April & May 2021 support this.
While spending patterns may have changed, cash still remains the most preferred mode of payment and to receive money according to a recent pilot survey by the RBI in six cities with 6,192 respondents.
Featured Image: Value of Digital Transactions


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Data: Water Bodies Census Indicates That More Than 30% of all Water Bodies in India Are in West Bengal
Sai Krishna Muthyanolla
May 1, 2023
The Ministry of Jal Shakti recently released the report on the first-ever census of water bodies conducted across the nation, covering more than 24 lakh water bodies. The exercise has been carried out with the objective of developing a national database for all water bodies.
The Ministry of Jal Shakti recently released the report on the first-ever census of water bodies conducted across the nation, covering more than 24 lakh water bodies. The exercise has been carried out with the objective of developing a national database for all water bodies by including important information on most parameters related to the subject such as size of the water body, usage, status of encroachments, storage capacity, status of filling up of storage, recovery works, and other details. There are two volumes to the census, one which provides all India figures and the second which contains state-wise reports.
The census was launched under the centrally sponsored scheme, “Irrigation Census” in convergence with the 6th Minor Irrigation Census to meet the objective mentioned earlier. This has been done following the recommendations of the Standing Committee on Water Resources in 2015 and 2016 to make such data available on public domain.
Water bodies which have a bounded storage have been included in the Census
For this census, water bodies have been defined as ‘all-natural or man-made units bounded on all sides with some or no masonry work used for storing water for irrigation or other purposes like industrial, pisciculture, domestic/drinking, recreation, religious, groundwater recharge, etc.’
These water bodies are typical of various types and known by different names such as tanks, reservoirs, ponds and bundhies, among others. A structure where water from ice melt, streams, springs, rain, or drainage of water from residential or other areas is accumulated or water is stored by diversion from a stream, nala or river has also been treated as a water body.
However, some water bodies have been excluded from the census. These are oceans, lagoons, rivers, springs, waterfalls, etc. which are free-flowing without any bounded storage. Water tanks and temporary water bodies created for household usage, cattle, and factories have also been excluded.
A traditional methodology was adopted for the census of water bodies by employing paper-based schedules for rural and urban areas. Three schedules, namely, ‘Village Schedule’, ‘Urban Schedule’ and ‘Water Body Schedule’ were canvassed in the census. Additionally, a smartphone was used to capture latitude, longitude, and photographs of water bodies.
Huge disparity across number of water bodies in urban and rural areas is seen
The Census was conducted in 2017-18 across the country in 33 States/UTs except Daman & Diu, Dadra & Nagar Haveli, and Lakshadweep. A total of 24,24,540 water bodies have been enumerated for the Census, out of which 97.1% (23.5 lakh water bodies) are in rural areas and only 2.9% (69,485) are in urban areas, clearly indicating an overwhelming disparity across regions. Further, 55.2% of water bodies are owned by private entities whereas 44.8% of water bodies are in the domain of public ownership.
According to the data based on the census from Dataful, of the 24.2 lakh water bodies enumerated, nearly 31%, about 7.47 lakh water bodies are in West Bengal. Uttar Pradesh has the second most number of water bodies with 2.45 lakh water bodies accounting for more than 10%. Andhra Pradesh, Odisha, and Assam have over 1.7 lakh water bodies each. The five states together account for more than 63% of the total. Jharkhand and Tamil Nadu also have more than one lakh water bodies each. About 90.5% of the water bodies are in 13 states.
6 in 10 water bodies enumerated are Ponds
Over 14.4 lakh water bodies enumerated in the Census are ponds, accounting for 59.5% of the total. Tanks make up 15.7% (3.8 lakhs) and reservoirs constitute 12.1% (2.92 lakh). Water conservation schemes/percolation tanks/check dams constitute over 9.3% (2.26 lakh). Other water bodies make up 2.5%. Only less than 23,000 water bodies were lakes.
In terms of number of ponds and reservoirs, West Bengal tops the list with 1 in 3 ponds and nearly 96% of the reservoirs. Andhra Pradesh has the highest number of tanks and second most number of water conservation scheme projects or check dams while Maharashtra has the greatest number of such water conservation scheme projects, about 40% of the total. Tamil Nadu has the highest number of lakes as per the census.
India is among the most water-stressed countries in the world and water availability is projected to drop further
India is among the most water-stressed in the world. It sustains about 18% of the world’s population but has only 4% of its freshwater resources. More than 80% of water in the country is consumed for agriculture while the rest is used for domestic and industrial purposes. The average annual per capita water availability in the years 2001 and 2011 was assessed as 1816 cubic meters and 1545 cubic meters respectively which is projected to fall to 1367 cubic meters in the year 2031. Pollution of the available finite water resources coupled with exploitation is adding to the stress. Further, climate change is also likely to exacerbate the pressure on the country’s water resources while the frequency of occurrence of extreme weather events such as floods, heatwaves, and droughts is on the rise. It is at this time that the Ministry of Jal Shakti has come up with comprehensive data on water bodies in the country with details on encroachment, repairs, irrigation, etc. which gives critical insights into the country’s water resources.
Report has comprehensive data useful for planning and management of water bodies
The report highlights that there are about 3.56 lakh water bodies in the district of South 24 Parganas located on the southern part of the Ganges Delta in West Bengal, the highest for any district. In fact, the district has more water bodies than any other state and accounts for nearly half of the water bodies in the state of West Bengal. The predominant usage of these water bodies is for pisciculture and only 7.8% are used for domestic consumption. Despite the presence of so many water bodies, the majority of which are ‘in-use’ in the state, the district is faced with severe water scarcity for human consumption. This highlights that the mere presence of many water bodies is not enough, but proper management is also necessary.
The census is a welcome move by the government and the information provided in the census is critical for effective planning and policymaking to prevent pollution & exploitation, and to encourage judicious use, conservation, and restoration of these water bodies.
This story is the first in a series of stories based on the Census report on Water Bodies. The subsequent stories will cover state-level data in greater detail.
Featured Image: Water Bodies Census


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Data: What are some of the important goods we import from China?
Sai Krishna Muthyanolla
June 27, 2020
Amidst calls for boycott & ban of imports from China, what major goods do we actually import? What has been trend like in the past few years?
Over the past few months, there have been demands from many quarters in India to ban trade with China, especially to stop using Chinese products. This sentiment has also found support from public as well.
Initially, the demand for ban was in wake of COVID-19, since China was seen as the country of origin that spread the virus and did not do enough to let the world know about the virus. In the past few weeks, the clashes at India-China border along LAC have renewed the sentiment to ban products from China.
With the death of 20 Indian soldiers in Galwan valley during a border face off, the demand for ban on Chinese products has found widespread support from public. However, there has been no change in the official stand of the Indian Government regarding trade with China, except a few minor changes on labelling etc.
But what is the value of trade with China, especially the imports? What are the products that are imported from China? How much is India reliant on China as a trading partner? In this story we take a deeper look at all these questions.
Before 2018-19, India’s highest trade value was with China
As per the data on Export-Import Data Bank of the Commerce Ministry, the USA emerged as the leading trade partner for India in 2018-19 with ₹ 6.15 lakh crores. It has managed to just overtake China, with which the value of India’s trade in that year was ₹6.09 lakh crores.
Prior to 2018-19, China was India’s leading trade partner.  However, in 2018-19, value of trade with USA witnessed a significant increase, enabling it to overtake China. However, a major portion of it is due to the increase in India’s exports to USA.
Meanwhile, China continues to dominate the Imports into India. ₹ 4.92 lakh crores of the total ₹ 6.09 lakh crores worth of trade with China in 2018-19, are Imports into India.
China’s share in India’s total imports back to 2014-15 levels
China’s share in overall trade with India is 10.32% in 2018-19. This is a slight decrease from the previous year (2017-19) when it was 11.66%. This fall in the share of total trade can be attributed to the fall in the share of imports from China.
While China continues to hold the top position in value of Imports into India, its share in total imports has fallen in 2018-19 to 13.69% from the high of 16.4% in 2017-18. The share of Chinese imports in 2018-19 are back to the 2014-15 levels when it was 13.5% of India’s total imports. In the three years between 2015-16 & 2017-18, the share of Chinese imports was greater than almost 16% and more each year.
Meanwhile, the share of exports to China in India’s total exports has increased in 2018-19. It increased to 5.08% from 4.4% in the previous year. There is a consistent increase in share of exports to China in recent years.
Slight improvement in Balance of Trade with China
In 2018-19, the total Imports from China amounted to ₹ 4.92 lakh crores, whereas the exports to China were only ₹ 1.17 Lakh crores i.e. the imports are more than 4 times more than the exports to China.
India has a deficit Balance of Trade (BoT) with China i.e. the Imports are more than the exports. The increase in exports to China and the fall in Imports in 2018-19, is reflected in the improved BoT in 2018-19, which is a trade deficit of ₹ 3.75 lakh crores. The deficit has comparatively reduced compared to the previous year when it was ₹ 4.06 lakh crores. However, the reduced deficit in 2018-19 is still higher than the deficit in each of the previous years from 2014-15 to 2016-17.
India’s share in China’s overall exports is less than 3%
While the imports from China constitute a major share of India’s total imports, the same cannot be said with respect India’s share in China’s total exports. The value of goods which China exports to India is only 2.92% of their total exports in the year 2018. Further, India ranks 7 in 2018, among the countries which have the largest share of exports from China. USA with 19.3% of the exports has a significant share while the next largest export destination is Hongkong with 10.9% of the exports.
Even though India’s share in China’s overall exports is less than 3%, this has been consistently increasing in the last few years. In 2014, India’s share was 2.22% which increased to 2.93% in 2018.
Meanwhile, share of Indian imports in China’s overall imports is very less. India ranks 15 among Asian countries with only 1.03% of China’s total imports.
Electrical Machinery & Equipment form the major part of Imports from China
Out of the ₹ 4.92 lakh crores worth of imports from China in 2018-19, ₹ 1.44 lakh crores worth of imports is under the category ‘Electrical Machinery & Equipment’ i.e. nearly 30 %. However, the total value of imports under this category has reduced compared to previous years, when it was ₹ 1.47 & 1.83 lakh crores respectively.
Second highest category of imports by value are under ‘Nuclear Reactors, Boilers etc.’ which account for ₹ 0.94 lakh crores in 2018-19.  Organic Chemicals also account for a major portion of the total imports from China. The import of Iron & Steel fell over the last five years, but there is a slight increase in import of ‘Articles of Iron and Steel’.
Increase in the imports of ICs, Diodes, Semi-Conductors etc.
In the category ‘Electrical Machinery and equipment’, Electrical parts for Telephone sets, Mobile handsets etc. form the major subcategory of imports. In 2018-19, these accounted for imports worth ₹ 50.43 thousand crores. However, there has been a sharp decrease compared to the previous years, where commodities imported under this head were ₹ 99.21 thousand crores in 2017-18. The imports under this head decreased for the first time in 2018-19 after a consistent increase from 2014-15 to 2017-18.
Import of Diodes, Transistors, Semi-Conductors and similar products also decreased in 2018-19. The value of imports under this head was ₹ 14.13 thousand crores  in 2018-19 compared to ₹ 25.13 thousand crores in 2017-18. This trend is again similar to the trend observed in mobile handsets where the value of imports decreased in 2018-19 after a consistent increase for four years.
The import of Electronic Integrated Circuits has increased significantly in 2018-19. In 2017-8, imports under this category were worth ₹ 4.59 crores which increased nearly five times to ₹19.68 thousand crores.
Other electrical and electronic equipment are among the top 10 imported commodities. Import of Chemical fertilizers has increased from ₹ 6.73 thousand crores in 2014-15 to ₹10.71 thousand crores in 2018-19. Antibiotics also are part of the top 10 import sub-categories from China.
India is more reliant on imports from China
As the data suggests, the imports from China form not just a major share of overall imports but are critical to certain sectors  A significant portion of these imports form the inputs and raw materials for various industries. Although there is fall in imports for certain commodities in 2018-19, it cannot be concluded if this is a one-off case or something that would continue. At the same time, there is increase in imports of several commodities when the data is analysed at a more granular level.
There are around 1100 subcategories of commodities imported under 96 high level import categories. Many of these commodities are integral to Indian economy. Any decision on ban of such imports from China should consider various factors like their  penetration at various levels, suitable substitutes to such products or raw material either internally or other countries. Otherwise, it could be catastrophic to our economy, specially at a time when we are fighting another crisis in the form of COVID-19.
It also needs to be noted that while India is heavily reliant on imports from China, the same is not true in the case of China. Even if India bans imports of many commodities, its impact is not going to be felt by China as exports to India form a meagre share of China’s total exports.
Featured Image: Imports from China