financial year (2021-22) provided the current second wave of the Covid-19 pandemic has the peak by June ending, as per the rating agency Crisil.
Although,India’s Gross Domestic Product (GDP) growth slides down to 8.2 per cent for the ongoing it maintained its elementary baseline estimate of 11 per cent growth, however, the potential chances are tilting towards a downfall to the projection of 11 per cent growth for FY-22, stated Crisil during explaining the two scenarios.
In a middle-case scenario, where the second wave of Covid-19 peaks by May-end, the GDP growth fall to 9.8 per cent but will slide down to 8.2 per cent in the most severe cases. However, in both the cases, the permanent loss to the GDP moderately will be elevated to 12 per cent from 11 per cent for the Base case.
Crisil stated, “The intensity of the second wave of Covid-19 infections has come as a surprise and is haemorrhaging the country’s health infrastructure. That has made lockdowns and restrictions inevitable.”
The states with widespread cases throughout the country with the surge is much of a reflection of the peak of the first wave in September 2020. Crisil said, “Worryingly, the number of cases has exceeded the peak by over 3x, highlighting the increased burden on healthcare services,” highlighting the increasing caseload to the rural areas which have weaker healthcare infrastructure.
Though, lockdowns have been less restrictive considering the economic activity and are more in the most affected states. However, the permit has been given for Agriculture, construction, manufacturing and other essential services. Crisil said the economy of India can further hit capital inflows. Crisil further added, “The second wave can have moderate to severe impact on growth depending on how long it lasts. Pandemic will leave scars that will take time to erase.”
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