Uncertainty looms over already ailing Indian economy

New Delhi: Economic experts expect a greater impact of the second COVID wave on the Indian economy which has been ailing even from before the first COVID wave that hit the country last year.

The Monthly Economic Review Report for April 2021 by the Finance Ministry has already alluded to this downside risk to economic activity in the first quarter of FY22.

Several reports have said the economy was in the recovery trajectory from the first COVID induced crisis, after contracting the country's GDP by a massive 23.9 per cent in the June quarter due to a nationwide lockdown and by 7.5 per cent during the September quarter.

But data have shown the country could manage to step out of the recession with the GDP growing 0.4 per cent in the December quarter. However, the second COVID wave, which had claimed thousands of lives and is still counting lives, has upended India's dreams of recovery.

The Finance Ministry has expressed confidence that "Learning to operate with Covid-19, as borne by international experience, provides a silver lining of economic resilience amidst the second waves."

Instead of shutting the country altogether as the Centre did in the previous year, localised measures such as micro-containment measures, state-specific movement restrictions, mobilization of health supplies and ramping up of health infrastructure have been opted-out to minimise the economic impact.

Wall Street brokerage Goldman Sachs lowered its estimate for India's economic growth to 11.1 per cent in the fiscal year to March 31, 2022, as many cities and states have announced lockdowns of varying intensity to check the spread of coronavirus infections.