India equipped to tackle risk posed by fresh Covid-19 wave: Sitharaman
- India registered more than a lakh coronavirus cases on Sunday, surpassing even the peak of the first wave of the pandemic, with almost 50% of the cases being reported from Maharashtra.
India is poised to tackle any downside risk to the economy posed by the recent covid surge, guided by the learnings of its successful management of the pandemic during its first wave, while the vaccination drive continuously increases in scale, the finance ministry said on Monday.
“At the onset of the second wave, India is prepared to combat the scourge of the virus. It is well-equipped with adequate testing and health infrastructure and economic activity has adapted to the pandemic. This prospect is further bolstered by the fast rollout of vaccination,” the latest Monthly Economic Review released by the department of economic affairs said.
India registered more than a lakh coronavirus cases on Sunday, surpassing even the peak of the first wave of the pandemic, with almost 50% of the cases being reported from Maharashtra. The state imposed a partial lockdown on Sunday, closing down malls, theatres, hotels, restaurants and imposing a statewide night curfew to curb the transmission of the virus.
Maharashtra is the largest state in the country in terms of gross state domestic product (GSDP) and has a share of around 15% in gross value added (GVA). Thus, the stringent restrictions put in place will lower India’s GVA growth to 9.92% for FY22 and bring GDP growth down to 10.7-10.9%, said Madan Sabnavis, chief economist at Care Ratings.
“Care Ratings had estimated growth of 10.24% in GVA for FY22 for India towards the end of March, where it was assumed there would be return to normalcy during the year. But, with FY22 starting on a sombre note with a lockdown fully in place for Maharashtra and to a lesser extent in other states, overall production and consumption would be affected,” he said.
The finance ministry, however, said India is well-equipped to combat the effects of the virus. “Instrumental in this resilience will be a strong revival in investment growth supported by the Atmanirbhar Bharat Mission and a massive boost to infrastructure and capital expenditure provided for in the Union budget. The wheels of India’s capex cycle have been set into motion, signs of which were imminent in the second half. With the end of a challenging FY21, the crest of a brighter and self-reliant FY22 awaits India.”