1. BJP's regime has pushed the Indian economy into shambles.
Rating agency ICRA sharply revised to -9.5%, its forecast for India’s growth in the ongoing fiscal on account of the localised lockdowns announced by various state governments and rising cases of COVID-19.
2. ICRA sharply revised its forecast for India's growth to -9.5%
Stating that the developments arrested the nascent recovery that had set in during May-June 2020, the latest estimate took the agency to the lower end of the spectrum of growth expectations for the economy.
3. The lockdown and the pandemic has hit the economy to record low
In May, ICRA had said the country would see a 5% contraction in FY21.
“The Indian economy had started to recover from the troughs experienced in April 2020, when the lockdown was at its severest, and many sectors seemed to be adjusting to a new normal. However, the unabated rise in COVID-19 infections in the unlock phase and re-imposition of localised lockdowns in several states, appear to have interrupted this recovery,” said Aditi Nayar, principal economist at ICRA.
4. Unabated rise in COVID-19 infections and re-imposition of localised lockdowns further affected the economy.
While Uttar Pradesh had imposed a lockdown on the weekends in certain areas, Tamil Nadu, Bihar and Jharkhand announced a full lockdown till the end of the month. Fresh lockdowns have also been imposed in Pune and Bengaluru as well.
5. Several states have imposed fresh lockdowns due to rise in coronavirus cases
According to the report, this will likely result in deeper contractions in the second and third quarter of the fiscal and a longer recovery timeline. Second quarter output is likely to be -12.4% and the economy would only see “anaemic” positive growth of 1.3% by the fourth quarter, ICRA said.
6. The second quarter output is expected to be -12.4 %: ICRA
“The timeline for a firmer recovery out of the contractionary phase is now being pushed ahead to at least Q4 FY2021 from Q3 FY2021. This presumes that a vaccine will be widely available by then, which now appears necessary for discretionary consumption to recover in certain sectors such as travel, hospitality and recreation,” The report said.
7.Travel, hospitality and recreation have been severely hit due to the pandemic
Further, the report cautioned that the improvement in leading indicators such as goods and services tax e-way bills might not be sustained as pent up demand subsides. “In our view, pent up demand, especially for items that are now considered to be essential under the new normal of work from home, could lead to a temporary uptick in the production and sales of small to mid-ticket consumer durables in the initial unlock period. This would boost both e-way bills and GST collections, but may not sustain subsequently.”
8. Many other factors like GST and e-way bills will also fail sustainable collections: ICRA
India Ratings and Research Chief Economist, D K Pant said that the
pandemic hit at a time when the Indian economy was already experiencing a slowdown due to weakness in consumption demand.
9. Indian economy was already weak before the pandemic hit
The unemployment rate has reached a 40 year record high with millions of people including the migrants have turned jobless. Employees are facing pay cuts and forced leave and the economy shows no sign of recovery.
10.The unemployment rate has reached record high
The economy of India is in the worst phase as the government has wrongly placed its priorities. Indians suffer the brunt of deadly pandemic and economic crisis and government has no words to share.
11. People find themselves alone in the dual battle of pandemic and crumbling economy.
