The third Covid wave is unlikely to be as devastating as the second, because the nation’s vaccination drive gathers velocity, however there’s a want to stay guarded in opposition to the virus, the Finance Ministry stated on Tuesday in its Monthly Economic Report for July. The receding of the second wave, together with speedy progress in vaccination, has set the stage to additional speed up financial restoration, it stated.
With the second wave abating in most elements of the nation and states lifting restrictions in phases, there are seen indicators of financial rejuvenation because the second half of May, it stated. This resonates with the financial influence of the second wave anticipated to be muted.
“India’s vaccination drive continues to gather speed and breadth with the number of days taken to achieve an additional 10 crore doses reducing significantly from 86 days during the initial phase to 20 days now … the IIT-Kanpur SUTRA model predicts that the third wave is unlikely to be as devastating as the second one with infections and hospitalisations expected to be much lower than that in the second wave,” the Ministry stated.
Noting that inflation has remained above the band of 6 per cent in May and June, the report stated these pressures are more likely to smoothen out within the coming months, with easing of restrictions, progress of southwest monsoon, and up to date supply-side coverage interventions in pulses and oilseeds market. While systemic liquidity continued to stay in surplus in July, a decline in development of money in circulation mirrored a shift away from Covid-induced precautionary financial savings.
Financial markets demonstrated buoyancy within the month, with post-second wave revival seen in mutual funds, company bonds and insurance coverage markets, and volatility in fairness markets persevering with its downward trajectory. However, G-sec yield curve steepened mildly owing to inflation pressures, it stated.
“In sum, as 85 per cent of the most vulnerable 45+ (age) population has developed immunity against severe illness due to Covid, the impact of subsequent waves on hospitalisations and deaths may be limited even though these waves may cause increase in infections. The attention must therefore now be directed to similarly enhancing immunity among the children and adults in the 18-44 age groups,” it stated.
“Delta variant accounted for nearly 8 of every 10 cases of Covid disease in India from May to July. This resurgence is a reminder of how critical it is to continue maintaining the guard against an unpredictable virus,” it stated.
