Covid second wave shock limited to Q1, recovery tied to vaccine: Finance Minister Nirmala Sitharaman

By Express News Service
NEW DELHI:  The second Covid wave has somewhat dented the economy but its impact will be confined to the first quarter of this financial year, claimed the monthly economic report released by the Union finance ministry on Wednesday.

However, this prognosis will hold true only if the vaccination drive becomes aggressive and all Budget announcements are implemented efficiently, the report added.

In other words, if the inoculation programme drags, it will drastically impact future economic recovery. 

“The onset of the second wave of Covid-19 since mid- February 2021 and localised or state-wide restrictions adopted to combat its spread, have posed a probable downside risk to the momentum in India’s economic recovery in the first quarter of 2021-22,” it noted.

The report added that with state-level lockdown restrictions, manufacturing and construction activities could experience a softer economic shock in Q1. 

“To avoid or lower the ferocity of subsequent waves, an accelerated vaccination drive is imperative. Vaccinating to achieve herd immunity (75-80% of population) will boost consumer and producer confidence and reinvigorate the engines of economic growth. For this purpose, challenges pertaining to vaccine supply, vaccine hesitancy, operational aspects to achieve high daily throughput, and widespread reach must be anticipated,” it said.

The finance ministry has made a strong pitch to vaccinate 70 crore people with at least a single dose by September to boost confidence among people and regain the momentum of economic recovery. 

“With around 120 days to 31st September 2021, around 93 lakh vaccinations are required per day to achieve herd immunity. The peak daily vaccination rate attained till date is 42.65 lakh. This peak was achieved using one shift of 8-9 hours of vaccination. So, doubling the shifts and possibly vaccinating 24×7 for a couple of months – particularly in August and September when supply is expected to increase significantly – can enable the ambitious, but possible, throughput of 1 crore shots a day,” the finance ministry’s monthly report recommended, adding that this is ambitious, but possible.