SBI report emphasises on vaccination, says nearly half of the new cases in rural India

‘Economy taking a severe hit from 2nd wave; Growth hopes fading'

May 07, 2021 05:12 pm | Updated 05:17 pm IST - NEW DELHI

Representational image | India must vaccinate its people on a mission mode, even if it means suspending economic activity for a while after the second wave, the report said.

Representational image | India must vaccinate its people on a mission mode, even if it means suspending economic activity for a while after the second wave, the report said.

The second wave of the COVID-19 pandemic has engulfed rural India, spreading far beyond the worst hit cities and districts, with nearly half the country’s new cases being reported from rural districts, an SBI research report said on Friday.

Red-flagging the slowing vaccination pace from an average 28 lakhs per day in April to just 17 lakhs per day, the country’s largest bank’s research team said vaccination is the primary tool to reduce the severity of infections and India must vaccinate its people on a mission mode, even if it means suspending economic activity for a while after the second wave.

“Given this trend, we believe India can only be able to vaccinate 15% of population by October ’21 (which is required for herd immunity given the other countries’ trend) but only if we are able to vaccinate around 55 lakhs daily in September & October, the report said.

With daily cases of more than 3.5 lakh in the past nine days, SBI said that the share of the top 15 districts in total new cases has dropped sharply from 55% in March to just 26.3% in May, suggesting the spread of infections is now far more widely dispersed, as per the report authoried SBI group chief economic advisor Soumya Kanti Ghosh.

Mobility and case load

Terming the increase in rural penetration of COVID-19, also flagged by micro-finance lenders to the central bank last week, as ‘worrying', Mr. Ghosh said the share of rural districts in new cases has increased to 48.5% in May compared to 36.8% in March. The case load is not directly related to people movement, he pointed out, as cases have increased in Kerala, Bihar, Haryana and Uttarakhand even as mobility declined there.

India’s hopes of a healthy growth rate in 2021-22, after last year’s sharp contraction, also appear unlikely to come true. On April 23, SBI had revised its growth forecast from 11% to 10.4%. Two weeks later, it is a ‘little apprehensive’ of double-digit growth in the year.

“We had earlier revised our FY22 real GDP estimate from 11.0% to 10.4%. At that time, only a few States (like Maharashtra & Delhi had imposed lockdowns and most of the States adopted night curfew only. Now the situation has altered completely,” the report noted, adding that 48 lakh new Covid-19 cases were recorded since April 23 and its spread has reached far with ‘almost each and every state imposing total or partial lockdowns’ now.

Economic activity has now taken a severe hit, the report said, citing some indicators that have returned to August 2020 levels.

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