The second wave of Covid-19 in India poses a downside risk to economic activity in the first quarter of FY22, the Finance ministry has said in its Monthly Economic Review Report for April 2021. However, the government expects a “muted economic impact” of the second wave compared to first wave.
The second wave in India is witnessing a higher caseload, with new peaks of daily cases, daily deaths and positivity rates. Many parts of India have been severely hit by the swift spread of the second wave, with cases reaching new highs with each passing day. The total number of active cases have surged past the 35-lakh mark, accounting for 17 per cent of the total infections, while recovery is hovering around 82 percent. And the daily new deaths are almost 3 times higher than the first wave.
The momentum in economic recovery since the first wave moderated in April due to the second wave in India and this undoubtedly presents a challenge to ongoing economic recovery. The Finance Ministry has however 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,”
Agriculture is one sector that stands out amid the Covid gloom, with record foodgrain production estimated in the ensuing crop year on the back of predicted normal monsoons. India is set to have the third consecutive normal monsoon this year, with the India Meteorological Department predicting a normal southwest monsoon in the June-September period.