NEW DELHI: has cut India’s growth projection to 10 per cent from 11.5 per cent for the current financial year, citing the adverse effect of the second Covid-19 wave.
In the worst-case scenario, growth could be further lower at 8 per cent, it said in a report. “It is possible that the infection and fatality curve will peak within the next few weeks and epidemiologists are not ruling out a possibility of a decline that is just as sharp as the rise,” the report said.
It sought for keeping industry open to limit the economic impact of the second wave but raised concerns over the health of the workforce as higher infection rates are likely affect the availability and productivity of labour. “We also flag the risk to our farm output (beginning with kharif sowing) if, as anecdotal evidence suggests, the virus is spreading to rural areas,” Abheek Barua, the bank’s chief economist, said.
Experience of other nations grappling with a second wave of infections has shown that wider lockdowns coupled with aggressive vaccination programmes proved to be effective in containing the spread. “A full-scale lockdown strategy might become imperative for states that have relatively weak health infrastructure such as UP and Bihar that grapple with the Covid-19 wave,” the report said.