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COVID-19: Impact of state lockdowns on economy

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71 percent of the respondents believed that India’s GDP will dip down below 9 percent for the financial year 2022.

COVID-19: Impact of state lockdowns on economy

The various state lockdowns will have an impact on India's gross domestic product (GDP) forecast, revealed the results of a recent survey by credit rating agency CARE Ratings.

The survey was undertaken by CARE Ratings agency to understand the impact of lockdowns and lockdown-like restrictions by various state governments on the Indian economy.

Respondents of the survey were from various backgrounds including manufacturing, financial services, power, non-financial services, and the SME sector.

71 percent of the respondents believed that India’s GDP will dip down below 9 percent for the financial year 2022. Forecast by CARE Ratings for India’s GDP for the same period is currently at 9.2 percent, after being revised 4 times already this year.

Even as various lockdown and lockdown-like restrictions have been imposed across the country by state governments, 77 percent of the respondents expressed that the current lockdowns were not as strict as that of last year.

Perhaps then unsurprisingly, only 54 percent of the survey takers believed that the lockdowns were not a solution to the COVID-19 crisis currently plaguing the country. Exactly the same number of participants expressed confidence in India’s vaccination drive as well.

Just over half the respondents also expect business conditions for MSMEs to worsen over the next 6 months while nearly 80 percent believe the NPAs will worsen because of the lockdowns.

A vast majority of the survey takers were also of the opinion that such measures will likely impact migrant labours. The hospitality, travel, and textile sectors are expected to be the worst affected due to lockdown, according to the survey.

India currently has 36,73,802 active cases as per official records. The national death toll stands at 2,66,207 according to official data but a recent study estimated that at least 4.3 lakh deaths either went uncounted or unreported in India. The survey was conducted with the participation of 305 respondents during the period of April 27 to May 11.

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