Barclays Securities, an international broking firm, had projected a GDP growth of 11 per cent for the Indian economy before the onset of the second wave of the Covid-19 pandemic. It has now revised its forecast by a full percentage point to 10 per cent.
According to a research report titled “India: Tracking COVID-19 and Vaccines”, Barclays analysts Rahul Bajoria and Shreya Sodhani said: “In a more pessimistic scenario, whereby the pandemic is not brought under control soon, the economic losses could be much higher. If mobility restrictions remain in place until the end of August, this could point to another 120 bp of downside to annual real GDP growth, dragging FY 2021-22 growth to 8.8 per cent y/y."
Research from the State Bank of India (SBI), India’s leading commercial bank, has also revised GDP growth estimates for 2021-22 to 10.4 per cent, down from 11 per cent earlier. The reason: Covid curbs across states.
“India must vaccinate its population with single-minded focus to achieve herd immunity and avoid any further waves as other countries are facing,” said Soumya Kanti Ghosh, Group Chief Economic Advisor at SBI, in the report.
That, then, is India’s Covid report card. There’s some good new coming from the medical front. But it’s coming at the cost of the economy.
The Modi government will have to figure out a way very quickly to strike a balance between the two goals – of controlling Covid without sacrificing economic growth.