It is a no-brainer that our economy is going to be severely affected due to the extended lockdown.
We are already seeing ripples of it with the rise in unemployment, shortage of essential items and lack of available resources. But just how bad will it be?
As the nationwide lockdown has been extended till May 3, Barclays, a Brokerage firm, has revised its growth estimated to say that now India will grow at a rate of 0.8% in the financial year of 2021.
As for this year, the projected growth is expected to remain stagnant at 0%.
Even with the previously sluggish growth, the situation wasn’t so bad. Barclays had previously predicted that the financial year 2021 will see a growth of 3.5% and the year 2020 would see a growth of 2.5%.
Earlier, when the lockdown was for 21 days, it was estimated that India will lose $120 billion.
But now that the lockdown has been extended to over 40 days, the report suggests that it will cost India nearly $234.4 billion or Rs 17.8 lakh crore. This is nearly 8% of our present GDP.
In the accompanying note with its report, it said:
Despite being characterised as essential sectors, the negative impact of the shutdown measures on the mining, agriculture, manufacturing and utility sectors appears higher than we had expected.
With these fresh numbers coming in, there is a more and more need for a bigger rescue package by the Indian government.
The previous 1.7 lakh crore relief plan presented by the Finance Minister, Nirmala Sitharaman might just be inadequate to absorb such a large shock.