Written by Sajjid Z. Chinoy
The dramatic resurgence of COVID-19 in India risks reshaping the domestic macroeconomic narrative. Till a month ago, the focus was on assessing the nature of the economic recovery from the first wave, and its implications for fiscal and monetary normalisation. That narrative, however, risks being disrupted by fast-moving developments on the virus front.
India’s daily new cases have surged past 1,50,000, much above the first peak, a pattern similar to the US, UK, South Africa and Brazil, where second waves had much higher amplitudes. In India’s first wave, the increase from 50,000 to about 1,00,000 cases took about 50 days; in the second wave, it’s taken just 13. To start with, the second wave was more concentrated, with Maharashtra accounting for 60 per cent of cases. But its share has now dropped to below 40 per cent. While the top five states still account for about 65 per cent of cases, the reproduction (R) factor in almost 10 states is estimated to be two or higher, creating risks for a wider and more rapid spread, if unaddressed.
While case fatality ratios are lower, the sheer speed of the second wave has meant the elevated “denominator” is putting pressure on some healthcare systems. Therefore, even as policymakers are understandably reluctant to impose blanket lockdowns — given the associated economic disruptions — they may have no choice but to impose local or regional circuit-breakers to ward off pressure on the healthcare infrastructure. A series of local lockdowns have been announced in recent days, and more can be expected, reflected in the Oxford Stringency Index — a measure of restrictions on activity — jumping by almost 30 per cent over the last week.
Courtesy - The Indian Express.
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