June 09, 2021 / 19:21 IST
The economic impact of the second wave COVID-19 is likely to be restricted to the first quarter of 2022, the Department of Economic Affairs said in its monthly report.
As per the DEA, rapid vaccination of India's population and the frontloading of the fiscal measures are the key to invigorating investment and consumption.
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It also noted that capital expenditure had risen to 66.5 percent YoY in April 2021.
E-way bills witnessed an uptick in the second half of May this year. On agriculture, the DEA said that the sector continues to offer prospects.
There was a slackening in eight core industrial output, PMI manufacturing, highlight toll collections, and Goods and Services Tax (GST).
Construction rebounded to grow at 14.5 percent in Q4. As economic activity resumed following gradual unlocking and policy support, private consumption grew at 2.7 percent after falling for three consecutive quarters, it noted.
On the coronavirus pandemic, the DEA noted that the spread of COVID-19 has been rapid in rural areas. As per its report, the share of rural districts in new cases rose at a fast pace.
This is shown by how cases rose from 49.7 percent in April of this year to 57.9 percent in May.
"With state-level lockdown restrictions being more adaptive to learnings from the first wave, manufacturing and construction are expected to experience a softer economic shock in the current quarter," the DEA noted, adding that the pace and coverage of vaccination is critical to help India heal and regain the momentum of economic recovery.
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