Growth Rate Estimates For 2021-22: Japan’s brokerage company Nomura has drastically reduced India’s growth rate estimates due to the second wave of Corona epidemic. The company has reduced India’s GDP growth estimate to 10.8 per cent during 2021-22. Earlier, Nomura had expected the Indian economy to grow at a rate of 12.6 per cent during the current business year. The company has also said that the lockdown caused by the second wave of COVID-19 is having a very bad effect on the recovery of the Indian economy. According to Nomura, at present, economic activities in the country have fallen to the level where they were in June 2020.
According to an assessment by the Japanese brokerage firm, economic activity during the week ended May 9 has fallen to just 64.5 per cent compared to the level before the epidemic. The situation is so bad that in a week, a huge drop of 5 percent has been seen in economic activity.
Nomura says that the reduction he has made in India’s GDP growth estimates is the result of the slowdown in economic activity due to the lockdown. The company believes that its impact is also likely to be seen as a slowing rate of economic growth during the April-June 2021 quarter. According to the company, despite positive things like vaccination, global recovery and improvement in financial conditions, local conditions will be affected in the April-June quarter.
Nomura has also pointed out that restrictions on movement are a major reason for the decline in economic activity. According to the company, in the week ending May 9, the labor participation rate has increased by some 41.3 percent, compared to 38.9 percent in the previous week. But there has been a decline of 4.1 per cent in electricity demand on a week-on-week basis, which is a testimony to the slowdown of economic activity.
During the second wave of Corona in India, 4-4 lakh new cases are coming up every day for several consecutive days. Death figures are also greatly increased. In these circumstances, strict restrictions like lockdown or lockdown are applicable in more than 20 states of the country. These efforts to stop the epidemic are having a bad effect on the efforts to recover from last year’s recession.
During the financial year 2020-21, India’s GDP has seen a terrible decline of 7.6. For the current financial year, the Reserve Bank has expected to achieve a growth rate of 10.5 per cent, the main basis of which is the base effect of last year’s negative growth rate. But due to the second wave of Corona, questions are also being raised on the hope of achieving this goal. Some experts believe that if the ‘peak’ of the second wave of Corona comes in June, then the GDP growth rate of FY 2021-22 will not be more than 8.2 per cent. Keeping in mind the negative base effect of the last financial year, then this growth rate is negligible.
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