Domestic rating agency CRISIL has revised its projections for India’s GDP forecast to 1.8 per cent from 3.5 per cent it had earlier predicted for FY20-21. Pre-COVID-19 prediction by the agency was 6 per cent which was later revised to 3.5 per cent in March.
The agency predicts total losses of over Rs 10 lakh crore due to the nationwide lockdown to control the spread of the Corona Virus.
The agency has criticized the economic packages announced so far by the Indian government and said that there is a dire need of government support to boost the economy.
India Ratings and Research (Ind-Ra), another rating agency, has also lowered India's economic growth forecast for FY 2020–21 to 1.9 per cent. This will be the lowest increase in the last 29 years.
In March, the Central Government has released a package of Rs 1.70 lakh crore to support the poor people affected by Covid-19. This package is being criticized for the fact that this money is already being given by the government to the poor and it is not a new measure. On the other hand, the Reserve Bank of India has also taken some steps. It has reduced the interest rates and also taken measures to increase liquidity.
India has been under lockdown since March 25 and now running in phase 2 which will end on May 3. The slow growth rate is on the expected lines amid nationwide lockdown for over 40 days. However, according to the agency, it would be only China and India who may survive the recession post Covid-19.
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.
Furthermore, CRISIL is concerned about the fact that the policymakers are still in a dilemma, whether to extend the lockdown beyond May 3 or not. The threat of infection is still there and even if the lockdown has opened partially, will the people follow the social distancing norms? CRISIL added that if the norms are followed strictly, and the infection remains under control, there shall be reverses on the economic activity.
The agency predicts total losses of over Rs 10 lakh crore due to the nationwide lockdown to control the spread of the Corona Virus.
The agency has criticized the economic packages announced so far by the Indian government and said that there is a dire need of government support to boost the economy.
India Ratings and Research (Ind-Ra), another rating agency, has also lowered India's economic growth forecast for FY 2020–21 to 1.9 per cent. This will be the lowest increase in the last 29 years.
In March, the Central Government has released a package of Rs 1.70 lakh crore to support the poor people affected by Covid-19. This package is being criticized for the fact that this money is already being given by the government to the poor and it is not a new measure. On the other hand, the Reserve Bank of India has also taken some steps. It has reduced the interest rates and also taken measures to increase liquidity.
India has been under lockdown since March 25 and now running in phase 2 which will end on May 3. The slow growth rate is on the expected lines amid nationwide lockdown for over 40 days. However, according to the agency, it would be only China and India who may survive the recession post Covid-19.
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," -warned CRISIL
Furthermore, CRISIL is concerned about the fact that the policymakers are still in a dilemma, whether to extend the lockdown beyond May 3 or not. The threat of infection is still there and even if the lockdown has opened partially, will the people follow the social distancing norms? CRISIL added that if the norms are followed strictly, and the infection remains under control, there shall be reverses on the economic activity.
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