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April 26, 2021

Mounting toll

Covid-19 and its impact on economic activity in India

India’s second Covid-19 wave has wreaked havoc, with daily cases crossing a staggering 3 lakh in the week through April 25. India’s daily infections recorded the highest number of cases in a single day among countries worldwide in the last week, and daily deaths have crossed the peak of the first wave. Worryingly, their steep trajectory seems to be following that of daily cases.

 

Not only does the Herfindahl case concentration index ending April 25, shows dispersion of cases trending to the similar level as seen during peak of last year September 2020), but this time, the number of cases exceed the previous year’s peak by 3x, thereby highlighting the increased burden of cases. 16 major states saw double-digit growth rate in cases in week April 19-25, compared to the week prior.

 

The pace of vaccinations in India and across some of the worst-hit states further slowed down for the second straight week ending April 25, because of low vaccine supplies.

 

The March 2020 nation-wide lockdown led to a massive migrant exodus. This time, even though there have been no nationwide restrictions, the increasing number of cases have prompted states to announce localised restrictions and curfews in different forms. The magnitude of flows, cannot be estimated because of lack of official data on migrants. Passenger rail travel through the unreserved mode, used as a proxy for data of migrant flows, indicates increased activity in April compared with March indicating reverse flow of migrants following the announcements of localised lockdowns. However, one may need to discount the element of seasonality in data as with the onset of summer, migrants typically tend to return to rural areas for farm-related works. However, similar to last year, announcements of restrictions are expected to have driven this number somewhat higher. Similar data seen for reserved tickets shows a decline suggesting the impact of travel restrictions. An on-year comparison is not possible because of unavailability of data.