Private sector took 80% of first Covid wave losses

Almost 80% of all income losses during the first wave of the pandemic in 2020 were incurred by the private sector in India, while in many other countries the entire loss was on respective governments, a report said on Wednesday.

While the Centre had announced a Rs 21 lakh crore Covid r elief pac kage, c omprising 10% of the GDP, the actual financial support was only about 2% of GDP, as the rest was all credit-driven. "Almost four-fifths of all income losses during the pandemic in 2020 were incurred by the private sector in the country, while the government sector bore only about a fifth of the losses.

"This is in stark contrast to Australia, Canada, and the US, where the government sector incurred all the losses and eventually ended up transferring net resources to the pr ivate sector," Motilal Oswal Financial Services analysts Nikhil Gupta and Yaswi Agarwal said. However, the private sector faced losses between 20% and 60% in France, Germany, Italy, Spain and Britain, they added.

The income losses incurred by the Indian government by far was the the least at only about 20%, while it was 100% in the US and Canada. In Australia, the public sector loss said t he report was 200%.

Even in South Africa, the only other emerging nation included in the study, the government suffered all income losses.

Within the private sector, while the fiscal support made up for more than lost household (disposable) income in Australia, Canada and the US, households in India and South Africa incurred 6168% of economic losses during the year.