The surging second wave of the pandemic in India and subsequent restrictions imposed by various states on the business activities, has led the economic recovery to lose steam. According to a survey conducted by Care ratings, the country’s GDP growth is likely to be below nine per cent for the current fiscal.
Care ratings stated that due to the recent Covid situation in India, at least 80 per cent of the respondents expect consumer demand for non-essential items as well as investment to be severely and considerably impacted.
It stated that “The economic recovery is beginning to lose steam with infection rates scaling record highs. Almost seven out of 10 respondents expect GDP (growth) to be below nine per cent for FY22,”.
Given, rising covid positive numbers in rural India, according to the study, the majority of respondents who have been scrutinizing how India has been handling the situation, for months now, expect the lockdown announced by several states to stay till May-end.
According to the report, altogether, 54 per cent of the people, who participated in the survey, believe that the lockdown is a solution to the current COVID-19 situation in the country.
If the current lockdown is compared to the last fiscal’s lockdown, it can be noted that the current lockdown does not even come close to the severity of the last year’s lockdown. Several people in the survey have also supported the argument. Little more than three-fourth of the respondents emphatically feel that the current lockdown is not as stringent as the restrictions imposed last year.
In addition to Care Ratings, another rating agency, namely CRISIL, also stated that the India’s economic growth (GDP) is likely to drop to 9.8 per cent in a moderate scenario, which assumes India’s second wave of coronavirus disease to peak by May- end. But the agency also added that India’s economic growth (GDP) might fall to 8.2%, if the covid’s second wave peaks by June.
Similarly, Moody’s Investors Service joined various other rating agencies to slash its FY22 economic growth forecast for India from 13.7% estimated earlier to 9.3%. The reason cited for a low economic growth was the negative impact of the second wave of the coronavirus pandemic on Indian healthcare system. Moody’s stated that the severe second wave of coronavirus infections would “slow the near-term economic recovery and could weigh on longer-term growth dynamics”.