Amidst the COVID-19 outbreak and the subsequent lockdown, the India’s economy appears to be in tatters. And would take a while to bounce back .
In yet another grim prediction of India’s GDP growth rate, the Domestic rating agency Crisil has nearly halved its GDP forecast for India to 1.8 per cent for 2020-21 while projecting total losses of Rs 10 lakh crore or Rs 7,000 per person due to “disastrous” lockdowns to control COVID-19 pandemic.
Another rating agency India Ratings and Research (Ind-Ra) has also revised the FY2021 economic growth forecast for the country further down to 1.9 per cent, the lowest in the last 29 years.
The nation has been put under a 40-day lockdown in two phases till May 3 to check the spread of infections. Economists were quick to flag concerns on such a move that chills all activity, and some also expect a contraction in the economy in FY2021.
The government has responded with a Rs 1.70 lakh crore package, which was criticised for not being entirely new money, while the RBI has taken a slew of measures by cutting rates and also upping the liquidity supply.
“Lockdowns are showing a disastrous impact on the economy and could lead to a permanent loss of GDP, unemployment and poverty, despite relief packages,” Crisil warned on Monday while revising down its growth estimates.