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Business EYE MAY 28, 2021 | The Indian Eye 36

Second-wave Impact:

Indian economy wobbly as vaccination

plans stumble

Lockdowns of varying severity are leading to reduced mobility and unemployment

“The ongoing catastrophic
Our Bureau second wave in India, following

New Delhi a terrible wave in Brazil, is a sign
the worst may be yet to come in
ndia’s economy, which was the developing world,” it said.
showing signs of recovery While India’s health system
Iin early 2021 after the first held up fairly well in the first
Covid-19 surge, has now been wave, this time its health system
hit by the second wave of the is so overwhelmed that many
pandemic. Multiple states are people are dying because of a
enforcing lockdowns of varying lack of medical supplies like ox-
severity, leading to reduced mo- ygen, hospital beds, and medical
bility and unemployment. care, the report said.
The second wave of the pan- “India is a warning of possi-
demic in India is more of a hu- ble events in other low- and mid-
manitarian crisis rather than an dle-income countries (LMICs)
economic one, and is likely to that so far have seemingly es-
have peaked, a Japanese broker- caped the pandemic, including
age said on Thursday. Nomura India needs to boost its vaccination plan to get the economy back on track (ANI) in Africa,” it said.
said it expects the overall hit to In its report, the IMF
sequential growth in April-June als eking out a daily livelihood The report, with research inputs said that an urgent focus
to be much less severe than last and small businesses, both orga- from researchers Rahul Laho- should be to eliminate con-
year when there was a complete nized as well as unorganized. ti, Surbhi Kesar and Mrinalini straints on cross-border ex-
nationwide lockdown, and less More jobs will be hit and Jha, also concluded that women ports of critical raw mate-
than what the drop in mobility more economic distress will fol- and younger workers were dis- rials and finished vaccines.
suggests. It estimated the econ- low, according to economists proportionately affected by the Free cross-border flow of
omy to contract by only 3.8 per Amit Basole and Rosa Abra- downturn. Informality, poverty vaccine inputs and supplies is es-
cent in June quarter as com- ham of the Centre for Sustain- and inequality increased, and sential for the world to achieve
pared with March quarter. able Employment who co-au- households coped by reducing its vaccination targets without
Lockdowns are more nu- thored the recent report, “State their food intake and borrowing. delay.
anced this time and consumers of Working: India 2021”. The Meanwhile, observing that Governments are taking
and businesses have adapted, report analyses the impact of the ongoing “catastrophic” sec- steps to relax such constraints
it said, adding that internation- the first wave on India’s econo- ond wave of Covid-19 in India is on raw materials, it said, citing
al experience also suggests the my and employment sector be- a sign that the worst may be yet the recent pledge by the US to
same. Highlighting that the im- tween March and October 2020. to come, the IMF has said that facilitate greater access of criti-
proving global growth will act as It estimates that the number of the situation in the country is a cal raw material to Indian man-
a tailwind, the brokerage said it Indians reporting less than the warning of the possible events in ufacturers after severe shortag-
expects the current lockdowns national floor-level minimum low- and middle-income nations es emerged.
to last six more weeks. The bro- wage of Rs 375 increased by 230 that have seemingly escaped the However, there is scope for
kerage said vaccinations are million in this period. The find- pandemic till now. greater multilateral action on
trailing at present, but the pace ings are contrary to the Reserve A report co-authored by this front, as significant con-
of inoculation will pick up after Bank of India’s assertion that International Monetary Fund straints still remain, it said.
June as its analysis indicates in- the economic impact of the sec- (IMF) economist Ruchir Agar- The IMF report said India
creased supply. ond wave is not as severe as that wal and its chief economist Gita continues to face production
In the monthly economic re- of the first. Gopinath on Friday also said bottlenecks, including due to
port for April, the Reserve Bank The crisis is creating a large that under the business-as-usual ongoing shortages of critical raw
of India points out that the eco- population of poor who are not scenario, the vaccine coverage materials, suggesting the need
nomic impact of the second used to thinking of themselves in India is expected to remain for further relaxation of de facto
wave of the pandemic was dis- as poor, Basole and Abraham under 35 per cent of the popu- export restrictions under the US
proportionately felt by individu- told IndiaSpend in an interview. lation by the end of 2021. Defense Production Act.

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