New Delhi, June 22 (IANS) Indias early lockdown will delay the peak of the Covid infections and this extended period of peaking will delay economic resurgence.
According to a research by Centrum Broking, India on its part went for an early lockdown, delaying the peak. As lockdown 4.0 gets uplifted, more than 50 per cent of India is now open, the report said.
“However, early lockdown though contained the infections and mortalities; it will delay the peak also. Some estimates say that India may peak as late as November. This extended period of peaking out will also keep people at home for a longer period, affecting the economic resurgence,” the report said.
Even before Covid 19 India was struggling for growth with GDP growth at 4.5 per cent. Even though RBI and government on their part have pumped liquidity in the economy, they have done little to spruce up the demand.
In this background, India will take a longer time to come out of this downturn. “We expect FY20 demand to return only 2 years i.e. in FY23 for many sectors,” the report said.
The Indian economy is likely to be laggard verus the world, the report said. Before the onset of Covid, Indian economy had slowed down to 4.5 per cent GDP growth, not participating in the global resurgence of calendar year 2018 and 2019.
For India, this came at most inopportune time as the eco showed nascent signs of recovery after bold measures.
India rightly went in for early lockdown to counter Covid, thereby delaying the peak, but will have much slower economic recovery. Given last 2 years lacklustre growth, the government has limited resources to support demand in the economy. “Thus, we believe that the impact of Covid will be profound in India and the recovery will be more ‘U’ or ‘W’ than ‘V’ expected in some advanced economies,” the report said.
The rural economy is likely to recover faster than the urban economy as prospects remain intact. The forecast of a normal monsoon, its timely onset coupled with prospects of a bumper crop output along with MSP hike and recently announced rural focussed programmes all augur well for the rural economy. This bodes well for rural income and demand. These developments are likely to cheer farmers and policy makers as they hold potential to diminish the impact of Covid. These trends emerge as a silver lining amid an imminent growth contraction in FY21.