The second wave of Covid-19 in India represents a disadvantage risk to economic activity in the first quarter of FY22, the Finance Ministry has said in its Monthly Economic Review Report for April 2021. However, the government expects a “muted economic impact” of the second wave compared to the first wave.
The momentum in economic recovery since the first wave moderated in April due to the second wave in India.
“Learning to operate with Covid-19, as borne by international experience, provides a silver lining of economic resilience amidst the second waves,” the Finance Ministry emphasized.
The conditioning food and fuel costs, normal monsoon, and expected facilitating the supply of food items, “may provide succor to a potent risk of rising in input prices surfacing as retail inflation,” the Finance Ministry added.
Agriculture keeps on being the silver lining, with record food grain production estimated in the resulting crop year on the back of predicted ordinary mansoon.