INSUBCONTINENT EXCLUSIVE:
In recent weeks, new coronavirus cases have shot up across India despite a nationwide vaccination driveA surge in coronavirus cases in India
could hurt the economy's recovery from a rare recession, as curbs to avoid a new wave creates delays in putting millions who lost their
jobs to the pandemic back to work."There is a restless urgency in the air in India to resume high growth, and incoming data point to even
contact-intensive services such as personal care, recreation and hospitality gathering traction," central bankers led by Deputy Governor
Michael Debabrata Patra wrote in the Reserve Bank of India's latest monthly bulletin
But "another outbreak, more lockdowns and restraints, will get unbearable in spite of learning from the initial experience of living with
the virus."That's seen as a cautionary footnote to the RBI's earlier year-on-year growth projection of 26.2 per cent for the April to
Kaushik Das, chief India economist at Deutsche Bank AG in Mumbai, says if cases continue to surge, it will cost the economy and the impact
on growth will be felt in the April to June quarter."Anticipating such a possible uptick in Covid-19 cases, we have already taken relatively
lower real GDP growth estimate for April-June of 25.5 per cent year-on-year," he said, compared to the RBI's forecast.In recent weeks, new
coronavirus cases have shot up across India despite a rollout of a nationwide vaccination drive
Confirmed infections have risen to more than 40,000 daily from a low of about 9,800 in February, pushing the overall tally past the 11.5
million mark.Unlike other Covid-19 hit regions such as Europe, India has so far been reluctant to reimpose any more harsh restrictions
Around this time last year, Prime Minister Narendra Modi ordered a strict national lockdown with just a few hours notice, inadvertently
causing an exodus of millions of city-dwelling laborers back to their villages rather than starve without work -- spreading the virus across
the breadth of the country and inflicting deep economic damage.Fast Facts on Virus Fight:For a country of its size, India's official
Covid-19 fatality rate remains relatively low at just under 200 a dayAfter a slow start the country's vaccination rate has also picked up
pace, with almost 45 million doses administered so far, up by about 15 million from a week agoThe latest outbreak is centered in
Maharashtra, a state that contributes 14.5 per cent to the country's overall GDP and is home to the nation's financial hub Mumbai
Some districts of Maharashtra have gone back into lockdowns, at a time when unemployment is ticking higher.India's jobless rate, as
calculated by think-tank Centre for Monitoring Indian Economy, inched up to 6.9 per cent in February from 6.5 per cent in January.Rahul
Bajoria, senior India economist at Barclays Plc in Mumbai, said if current restrictions remained in place for two months, then it will shave
0.17 percentage points from his next year's nominal GDP growth estimate of 11 per cent
Analysts at Nomura Holdings Inc
say the pandemic is starting to impact mobility.What Bloomberg Economics Says..."We are reviewing our GDP projections and expect to trim our
current forecast for GDP to swing to 12.8 per cent growth in fiscal 2022 from an estimated 6.8 per cent drop in fiscal 2021."-- Abhishek
Gupta, India economistWhile official data show the city's hospitals haven't reached full capacity that induces panic, economists point to
India's weakened banking sector and a fragile fiscal position as key sources of economic risk."India's recovery is likely to be hampered
by the recent surge in infections, a waning fiscal response and balance sheet stresses," said Priyanka Kishore, head of South and south-east
Asia economics at Oxford Economics in Singapore
According to her, economic momentum slowed considerably in the January to March period and it could come off even further in the coming
months, proving to be a drag on growth."We expect monetary conditions to remain accommodative through 2021, with the fiscal impulse set to
wane from the second quarter," she added.The Reserve Bank of India's monetary policy committee will meet early next month to decide on
interest rates, which are widely expected to be held at record low levels.(Except for the headline, this story has not been edited by
TheIndianSubcontinent staff and is published from a syndicated feed.)