Chennai, 19 May 2021:
With the second wave of Coronavirus forcing India upside down, several indicators clearly show that Indian economy is already feeling the stress of the ongoing deadly pandemic wave. After a hasty and unplanned two-month-long lockdown last year put Indian economy into coma, the Narendra Modi-led Union Government has made it crystal clear that plan to implement a similar lockdown in second wave is remote and he had told state chief ministers that they must use lockdowns as the last resort to stop the spread of coronavirus.
According to Barclays India Economist Rahul Bajoria economic activity picked up and eked out a growth rate of 0.4 percent for the quarter ending December compared to the same period the year before.
The second wave has set off fears of another national lockdown. Last year’s lockdown, one of the world’s strictest, was implemented with a mere four hours’ notice, trapping many with little access to basic services. So one cannot really blame the rumour mill for being on overdrive of late.
While hardly anyone expects the country to be locked down like last year, it remains anyone’s guess as to how the virus may progress and what actions the federal or state governments may take in response.
For now, the International Monetary Fund is forecasting India’s growth rate for 2021 to be 12.5 percent.
Sectors such as malls, travel and tourism, spas and salons will most likely bear the brunt of the second wave as Indians once again forced to be at home to avoid getting infected.
The vast majority – 90.7 percent (PDF) – of India’s workers operate in the informal sector, without written contracts, paid leave, health benefits or social security, according to the International Monetary Fund’s latest available data. So a prolonged period of uncertainty could affect hundreds of millions of India’s poor and that could again hurt growth.
One of the biggest impacts of the 2020 lockdown was a sharp rise in unemployment, especially in the unorganised sectors. In April 2020, unemployment in India touched 23%. However, as the country reopened, the job market started recovering and by February 2020, the unemployment rate fell to 6.9%.
This month though, the unemployment rate has gone up to 8.40%. The crisis is being felt most in urban parts of the country, where the joblessness is above 10%.
The Indian Medical Association (IMA) National President, Dr JA Jayalal has come forward urging the citizens to get vaccinated. Emphasizing the importance of vaccines, Dr Jayalal said that vaccination is the “only way forward”. He also highlighted that without mass vaccination, it will be dangerous to face the third wave “which is bound to happen.” IMA National President Dr Jayalal has advised for door-to-door vaccination drive to combat the current crisis of COVID-19.
So, the only option available before the Government of India is mass vaccination, so that economy gets a chance for survival.