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May 03, 2021

Wall of worry

Covid-19 and its impact on economic activity in India

India’s crushing second Covid-19 wave continues to make new peaks with every passing day, as daily cases near the 4 lakh+ level. If it was any consolation amid the steep rise in daily cases and deaths, growth in recoveries, which lagged cases till last week, grew faster by 57% in the week April 26 - May 2. That compared with 16% growth in cases. Growth in daily cases in major affected states, such as Maharashtra, Madhya Pradesh, Chhattisgarh, Uttar Pradesh too slowed down, compared with the week ending April 25. But recovery rate has declined to ~82% as of May 2, due to the high base of confirmed cases.

 

More worrying signs. Hitherto considered an urban phenomenon, the second wave is closing in on rural India. The share of predominantly rural districts in new cases in April was 30%, up from 21% in March. This is still lower than the peak reached in the first wave (at 40% in August 2020).

 

Further, daily vaccinations are slowing as vaccine supplies are choked. They dropped from 1992 per million in the week prior, to 1585 per million on average, in the week ending May 02. This is the third straight week that daily vaccinations have declined. Cumulatively, India has administered 15.4 crore doses. Even as India has announced its third phase of vaccination starting May 1, opening it up for those from 18 years upwards, several states have expressed inability to begin the drive owing to shortage of supplies.

 

High frequency indicators are now clearly showing the impact of state-announced restrictions as they softened for the second consecutive week