Quickonomics: Moving the needle - CRISIL Research

Overall, economic activity will be sluggish till then as contact-based services will only partially recover.

Jun 24, 2021 07:06 IST India Infoline News Service

India’s second Covid-19 wave is finally ebbing, with weekly average cases declining to ~60,000. That’s still high, but a huge relief nevertheless, when considering that cases had risen to 4.14 lakh just a month back.

With this, states have started relaxing lockdowns – with caution. Also, unlike in 2020, when restrictions were swiftly lifted as cases started to decline, curbs have been prolonged this year with state governments wary.

The Indian Council of Medical Research (ICMR) recently recommended three conditions before opening up the districts: below 5% positivity rate, 70% of vaccination coverage, and mandatory social distancing.

Given the healthcare challenges posed by the fierce second wave of Covid-19 infections and warnings about an impending third wave, restrictions in some form is expected to continue at least till a larger proportion of the population is vaccinated. Overall, economic activity will be sluggish till then as contact-based services will only partially recover.

The vaccination rate in India has been worryingly slow due to lack of supplies. From a peak of 3.5 million doses average per day in mid-April, India’s vaccination rate fell to 1.3 million per day in the third week of May, and rebounded to 3.2 million per day in the week ended June 20. With the new vaccination policy kicking in, June 21 saw a record 8.6 million jabs. It is important that this run-rate continues for the rest of 2021.

So far, just 3.8% of the total population has been fully vaccinated and 17.2% has received one jab. The government aims to fully vaccinate 100% of the adult population by December (against 5.5% of the adult population fully vaccinated so far). That’s tantamount to the required run-rate of ~8 million doses per day between now and end-December, or 3x the pace seen so far.

Source: CRISIL Research

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