The second COVID-19 wave which is spreading fast beyond the worst-affected districts in the country, could dent economic activity till June this year, and expanding vaccination pace in the country is the “need of the hour”, the Finance Ministry said on Friday.
The ministry also indicated it is not in favour of a national lockdown to curb the pandemic, citing global experience of handling the second wave of COVID-19.
While India’s second wave has seen new peaks in daily cases and deaths, active cases as well as positivity rates, the ministry said that the policy response is in sync with the ‘global experience’ and includes localized micro-containment measures, State-specific movement restrictions, mobilization of health supplies and ramping up of health infrastructure.
The impact of restrictions currently in place in the country, is evident in a decline in the Google mobility indicator to -37% in April 2021 from around -22% in March, the Department of Economic Affairs in the Finance Ministry said in its monthly economic report for April.
“Global experience also suggests that economic impacts from subsequent waves are smaller than from the first as economies learn to ‘operate with COVID’. The increased coverage of population under vaccination has been effective both in controlling the spread of Covid and boosting mobility,” it said.
“The second wave of COVID-19 has posed a downside risk to economic activity in the first quarter of FY 2021-22. However, there are reasons to expect a muted economic impact as compared to the first wave. Learning to “operate with COVID-19”, as borne by international experience, provides a silver lining of economic resilience amidst the second wave,” the report stated.
During April, the share of top 15 districts declined both for new cases and deaths, suggesting that the new variant is highly contagious and has begun to spread to other parts of the country, the finance ministry said, adding that active cases are rising at a faster pace in the 2nd wave, ‘with 5 lakh cases added in just 4 days – compared to 50 days during the peak of the first wave’.
“The need of the hour is to expand vaccination at a fast pace,” the ministry has said, in order to cope with the downside risks to the economy due to growing infections and consequent restrictions.
“At this juncture, rapid vaccination lends a ray of hope. April 2021 saw a doubling of global vaccination rates and a concomitant lowering of average transmission rates in countries with high vaccination rates. With vaccines doubly effective in battling the spread and shielding the economy, global cooperation is critical to ensuring availability of vaccines in all countries and addressing inter-country disparities in vaccination rates at the earliest,” it urged.
Within India, concerns about people refusing to vaccinate have moderated though States with large populations like Uttar Pradesh and Bihar as well as large urban settlements such as Haryana and Delhi continue to be a problem.
“Initial vaccine hesitancy seems to have receded with average daily doses more than 29 lakh in the month of April 2021 as compared to 15.7 lakh in March. State-wise Vaccine Hesitancy Index calculated as doses administered per 100 doses available show that North Eastern states and states like Goa, Jharkhand, Delhi, Bihar, Haryana, Uttar Pradesh are experiencing vaccine hesitancy,” the finance ministry report said.
“Recognizing vaccination as the crucial pillar to the ‘Test, Track, Treat and Covid-appropriate behaviour’ strategy, the access to vaccines has been deregulated and opened to all individuals above the age of 18 years,” it pointed out.
