Moody's Investors Service on Wednesday slashed India's growth forecast for 2021 to 9.6 percent, from 13.9 percent in the previous estimate. Simultaneously, Moody's said that due to rapid vaccination, economic restrictions will be limited in the June quarter.
The second wave affected the economy
Moody's report titled 'Massive Economics - India: The economic shocks from the second wave of Kovid will not be as severe as last year' said that high-frequency economic indicators suggest that the second wave of Kovid has hit India's economy in April and May. Impressed. However, this is expected to improve with the easing of restrictions by the states.
The economic loss will be limited to the April-June quarter
The return of the virus has increased uncertainty over India's growth forecasts in 2021, the report said, although it is likely that the economic damage will be limited to the April-June quarter.
Moody's further said, "We expect India's real GDP to grow at 9.6 percent in 2021 and 7 percent in 2022." The Indian economy has contracted by 7.3 percent in 2020-21, compared to a growth of four percent in the previous fiscal.
Government can give more relief to revive the economy
It is known that the central government can announce some more relief to revive the economy which is battling the effects of the corona epidemic. Giving this indication, Chief Economic Adviser (CEA) VK Subramaniam said, the government may take more measures to stimulate the economy affected by the second wave of coronavirus. However, he also said that the demand for a new stimulus package will be considered in view of the measures taken by Finance Minister Nirmala Sitharaman in the Budget 2021-22.