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Eight states accounting for 60% of GDP have maximum red zones: Crisil

Updated : May 19, 2020 07:23 PM IST

Credit rating agency Crisil Ltd on Tuesday said eight states accounting for 60 percent of GDP (Gross Domestic Product) have maximum red zones in the country.

In an interview to CNBC-TV18’s Shereen Bhan, DK Joshi, chief economist, said, "Maharashtra, Tamil Nadu and Gujarat are the most vulnerable as far as the output is concerned. The share of services and industry in these states is very high and the proportion of red zones is also high. Then Andhra Pradesh, Rajasthan and Uttar Pradesh are fiscally vulnerable as they have debt to GDP is very high. Also, they have fiscal deficits which over the last three years have averaged quite high and their dependence on liquor etc are also high. So if you put them together the fiscal vulnerability rises."

"In terms of jobs, Andhra Pradesh, West Bengal and Tamil Nadu have larger share of people as casual labour according to the Periodic Labour Force Survey (PLFS) survey of 2017-18. So from a big picture perspective, the first two phases of lockdown, they were pan India and similar in nature but phase 3 and phase 4 are going to be very different. However, one should not forget that the curve hasn’t flattened out yet as far as COVID-19 is concerned, so you cannot let your guard down. So in this situation even if there is opening up, it is going to be a bit slow," Joshi added.
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