Interestingly, the people are less afraid of the virus now than they were last year. They seem to be getting used to it. This could be a matter of genuine concern. By the middle of last week, India’s active case counts crossed the one-million mark. Fresh daily Covid cases spiked to a new peak of over 1.68 lakh at the end of last week. The new trend has outfoxed economic researchers, business analysts, industry and the government. Already, the government is thinking of reintroducing select containment zones or lockdowns in clusters.

A number of states have once again imposed night curfews and Covid-19 restrictions. Others are considering strict lockdowns to contain the spread of the second wave. Among these states are Maharashtra, Delhi, Madhya Pradesh, Haryana and Gujarat. Maharashtra is witnessing a big surge in new coronavirus cases and deaths. The latest health ministry data, updated on April 12, showed a steady increase of Covid-19 infections for the 33rd day in row. The active cases have increased to over 1.2 million, comprising 8.88 percent of the total infections, while the recovery rate has dropped further to below 90 percent.

Though Delhi Chief Minister Arvind Kejriwal has, for now, ruled out the possibility of a lockdown, he said new restrictions will soon be implemented in the national capital. Gujarat CM Vijay Rupani welcomed voluntary imposition of lockdowns at local levels by villages or market associations in cities. “The Gujarat government is not willing to impose a lockdown in the state considering the problems faced by the poor people. We have already imposed a curfew for 10 hours in a day to restrict the unnecessary movement of people,” said Rupani. Over the last weekend, Madhya Pradesh imposed a 60-hour lockdown as a number of its districts such as Ratlam, Betul, Katni, Khargone and Chhindwara — all bordering Maharashtra —have been witnessing record spikes in infections. Ratlam and Betul will be under lockdown for nine days. A week-long lockdown has been announced in Khargone and Katni. Thanks to an Assembly by-election scheduled for April 17, Damoh remained “open” for campaigning.

Adding to the crisis is a nationwide shortage of vaccines and hospital beds to treat surging Covid-19 patients. It may take a month or two before the drug firms are ready to step up production. Like Germany, India too is thinking of importing ‘Sputnik V’ vaccine from Russia for emergency use. The companies such as Johnson & Johnson, Zydus, Bharat Biotech, Novax, Indian Immunologicals and Biological Evans are all in various active stages of clinical trials to introduce new vaccines. The global market of Coronavirus vaccines is projected to reach $75.75 billion by the end of this year, according to the Brandessence Market Research. Considering the size of India’s population, the country’s Covid-19 vaccine market is worth $ 18 billion in terms of revenue, this year. However, India’s current rate of vaccine production and consumption does not cover even 10 percent of the needs and the market potential.

Under the circumstances, it may be too early to predict the recovery rate of India’s economy as well as its job scene, income and consumption levels. Ironically, only a fortnight ago or just before the latest wave of Covid-19 hit the country, IMF scaled up India’s FY 22 GDP growth forecast by one percentage point to 12.5 percent. The Fund's projection suggested that India would again become the world's fastest-growing large economy. According to IMF's latest World Economic Outlook, China comes closest, with a forecast of 8.4 percent economic expansion.

IMF also saw India's GDP growing by 6.9 percent — 10 basis points higher than its earlier projection — in the next financial year. The closest competitor, China, is projected to grow by 5.6 per cent in 2022. IMF's projection for India in the current financial year is the upper end of a range that the World Bank had forecast recently. Interestingly, IMF has also projected a stronger recovery for the global economy, at six percent in 2021, compared with 5.5 percent it predicted in January. It has projected that the global economy would grow by 4.4 percent in 2022. The world output had contracted 3.3 per cent in 2020.

The World Bank too has scaled up its projections of India’s economic growth by as much as 4.7 percentage points to 10.1 percent on the ground of strong rebound in private consumption and investment growth. The Bank had pegged the GDP growth at 5.4 percent for the country in its January report. However, the Bank also highlighted uncertainty about the second wave of coronavirus infections, the trajectory of the vaccination drive and its resultant impact on the contact-intensive sectors in the economy. It now appears that these projections are of little value in the face of the latest round of Covid-19 expansion in India as well as in many other parts of the world.

Several industries — led by travel, tourism and entertainment — are facing extreme hardship in the face of dwindling business for want of customers. The travel and tourism industry alone lost over Rs.1.5-lakh crore in revenue, last year. The Indian job market, which was showing improvement since January after getting contracted by almost 60 percent last year, will remain under pressure if the economy fails to grow at the 2019 level. The government, industry, millions of service providers and their employees are naturally worried. There is on magic wand to tackle the problem. The situation looks truly precarious. (IPA Service)