Imagenation

Not worth the wait

 With a surge in COVID-19 cases, economists are worried if the fragile recovery India has made will collapse under a new round of restrictions 

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Published 17 days ago on Apr 02, 2021 1 minute Read
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When the March 2020 lockdown of 21-days extended into months, economic activity slowed to a crawl, migrant workers began a surreal journey of walking hundreds of kilometers back to their villages and Moody’s slashed India’s credit rating to just a bar above junk. In the first quarter of 2021, the country’s GDP shrank by a never-before-seen 23.9%.

Things were looking bad till October 2020, when a few of the indicators such as rise in GST collections and manufacturing output and fall in unemployment rates showed that the economy was beginning to claw its way out of a technical recession. Now as things have begun to look up, a second wave of the pandemic has hit us — on March 27, India reported 62,258 new infections, the highest single-day rise in 2021. Anxiety of another lockdown is on the rise and RBI Governor Shaktikanta Das has tried to soothe nerves saying it is ‘unlikely’. But states such Maharashtra, which contributes 14.5% to the country’s GDP is seeing a surge in new cases, and has placed tight restrictions in public spaces.

Economists have expressed concern and a Bloomberg report quoted Kaushik Das, chief India economist at Deutsche Bank, as saying that the impact of surge in cases would be felt in the April-June quarter. They are right to be concerned; in February, the country’s core sector contracted by 4.6% with even steel and electricity shrinking by 1.8% and 0.2% respectively, after the two sectors had seen growth in the previous five months.

Can we take another round of restrictions, with or without lighting lamps and loud clapping?