Despite partially lifting the restrictions, the Indian economy remains in a deep slumber. Major economic hubs of the country continue to remain Covid hotspots and muted policy response from the government has only created indecisiveness among the market forces.

Downward trend continues to persist given the severe macro headwinds that the economy is facing. India's unemployment rate has climbed to 27.1% amid the Coronavirus crisis while GDP growth for FY21 is predicted to fall to abysmal 1-2% by most of the global research agencies. Global trade remains subdued with weak demand and the supply-demand chain continues to remain disrupted.

On one hand, the country's banking system is staring at a massive surge in distressed assets while on the other hand, MSME sector is fighting for its existence.

Intraday, Sensex closed 0.76% down at 31,443.38 while Nifty lost 71 points to close below 9,200. Bharti Infratel (up 7.40%), IndusInd Bank (up 6.78%), and Adani Ports (up 4.53%) were the major gainers while ONGC (down 4.61%), NTPC (down 4.49%) and BPCL (down 4.14%) were the major losers of the day.

Green zone resurgence: Insignificant from the economy's point of view

On the positive side, the Indian government has adopted gradual easing of restrictions and reconstruction of the economy. The lockdown has been partially lifted, depending on the severity of the spread of the pandemic.

Under the adopted policy, the districts under the green zone are permitted to resume their routine activities. As per the latest list, 130 districts fall under the red zone, 284 in orange and 319 in green zones, accounting for 18%, 39% and 43% of the total districts, respectively. 

On paper, allowing green zones to resume most of their activities seems a big positive. But, given the vast size of our country, the economic ramifications of the lockdown have to be studied based on the geographical distribution of the population and its workforce.

Deep data analysis reveals a few startling facts, undermining the economic significance of districts falling under the green zone. 

Population-wise, orange zone accounts for 44% followed by 32% in the red zone. Only 24% of the Indian population resides in the green zone. From the banking perspective, more than 70% of borrowers reside in the red zone; orange zone accounts for another 21% while only 9% of credit is owed to the green zone. Similarly, Red zone accounts for 62% of banking deposits; green zones contribution once again remains meagre at 12%

District-wise details of India's workforce suggest that almost 50% of India's salaried class belongs to the red zone while green zone accounts for less than 20% of the regular workers.

Key takeaway:

The compiled data suggests how the red zone accounts for a disproportionately higher share in terms of economic participation, especially when compared to the green zone. 

The virus containment in top 50 districts remains a top priority as it accounts for 16% of the population, 53% of banking credit, 47% of deposits, 17.5% of total employment and 33% of the regular-salaried workers of the country.

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