PACE OF BUSINESS PLUMMETS, MORE PAIN IN COMING WEEKS

BIZ RESUMPTION INDEX FALLS 16 PERCENTAGE POINTS BELOW PRE-PANDEMIC NORMAL

The economic impact of the second wave of the COVID-19 pandemic may intensify in coming weeks as more states may be compelled to impose stricter restrictions, Noumra said in a report.

Economic normalisation in the country has already been hit by the surge in cases, with the Nomura India Business Resumption Index falling 16 percentage points below pre-pandemic normal as of Apr 18. The index was at 83.8 for the week ending Apr 18, down from 88.4 the previous week.

"While lockdown stringency has not increased since last week, this may be temporary, as states could impose stricter restrictions in response to the burdening of hospital infrastructure," it said.

India has reported over 3 mln cases since the beginning of the month, forcing many key states like Maharashtra to announce complete lockdown to curb the virus.

Delhi on Monday also imposed one-week-long curfew in a bid to curb spiralling cases amid shortage of health infrastructure.

While Nomura sees sequential moderation in economic activity in April, it said, impact of the second wave on the economy will be benign compared to the first wave, which saw about two-month long nationwide lockdown.

Nomura noted that while mobility has been hit due to restrictions, power demand and labour participation rate have remained largely unaffected.

According to the report, power demand weakened by 3% week-onweek for the week ending Apr 18 but remained 12% higher than its two-year ago level.

Icra cuts FY22 GDP estimates by 0.5%

Domestic rating agency Icra cut its 2021-22 growth estimate by 0.5% on the upper end, as a newer spate of lockdowns and restrictions get imposed in pockets to arrest the rising COVID-19 cases. The agency now expects the economy to grow 10-10.5% in 202122, against 10-11% estimated earlier.

Starting with Maharashtra, a slew of other pockets in the countr y like Delhi have been taking to localised lockdowns to arrest the climbing COVID-19 cases, which derails economic activity.

"For Q1 FY2022 (April-June 2021), we had earlier expected a GDP expansion of 27.5%, boosted by the low base.