‘India well-armed to combat downside risks posed by surge in Covid cases’

Our Bureau New Delhi | Updated on April 05, 2021

India is emphasising on a five-fold strategy to curb the tide of new cases, says Finance Ministry report

The Finance Ministry, on Monday, expressed confidence of ‘combating any downside risk’ arising out of the second wave of Covid.

“As the vaccination drive continuously upscales in India and guided by the learnings of India’s successful management of pandemic during its first wave, India is now well-armed to combat any downside risk posed by the recent surge in Covid-19 cases. With the end of a challenging FY21, the crest of a brighter and self-reliant FY22 awaits India,” said a monthly report prepared by the Economic Affairs Department of the Finance Ministry.

This report has come at a time when India recorded one lakh-plus Covid positive cases. At the same time, Maharashtra has announced mini lockdown, apart from shutting down key services centres such as malls, cinema halls and dine-in restaurants till April 30. Many other States have also imposed or are planning restrictions. All these are posing a big question on the overall economic recovery. However, the monthly report has tried to shrug off such an apprehension.

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According to the report, instrumental in this resilience will be a strong revival in investment growth, supported by the AtmaNirbharBharat Mission and a massive boost to infrastructure and capital expenditure provided for in the Budget 2021-22. “The wheels of India’s capex cycle have been set into motion, the signs of which were imminent in the second half of the year,” it said.

Loss of momentum

Noting that manufacturing PMI indicates loss of momentum in March compared to February, the report highlighted the fact that the manufacturing sector conditions continue to improve sharply, outpacing the long-run series average, with firms scaling up production and witnessing upturn in sales.

Public attitude more “infectious” than COVID-19

It highlighted the positive development such as further strengthening in demand conditions, and these “could be clearly seen in auto sales and power consumption”. Monthly GST collections attained all-time record levels since its inception during March. The growth momentum in rail freight traffic remains upbeat, port cargo traffic has been growing Y-o-Y and domestic aviation will pick up further. The digital payment upsurge, too, continues unabatedly, powered by resumption of economic activity, financial inclusion through Aadhar enabled Payment Systems, and behavioural shift to digital payments,” it said.

On the second wave of Covid, the report said India has been able to delay the onset of the second wave – the gap between the first peak to start of second wave has been 151 days in India – while it was much lower in other countries. At this juncture of onset of second wave, as the report claimed, India is well prepared to combat the scourge of the virus. It is well-equipped with adequate testing and health infrastructure and economic activity has adapted to the pandemic.

This prospect is further bolstered by the fast roll-out of vaccination. “India is emphasising on a five-fold strategy to curb the tide of new cases – exponential increase in testing, effective isolation and contact tracing of those infected, re-invigoration of public and private healthcare resources, ensuring of covid appropriate behaviour (CAB), and targeted approach to vaccination in districts reporting large numbers,” the report said.

Published on April 05, 2021

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