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Second wave of covid-19 likely to have cost nation Rs 2 lakh crore in terms of output: RBI assessment
Jun-18-2021

An assessment made by the Reserve Bank of India (RBI) has revealed that the devastating second wave of the coronavirus pandemic in April-May is estimated to have cost the nation Rs 2 lakh crore in terms of output. It said the second wave's toll is mainly in terms of the hit to domestic demand on account of regional and specific containment rather than a nation-wide lockdown.  

Moreover, it said this wave has fanned into smaller cities and villages, sapping rural demand. The support from government spending may also moderate from the extraordinary expansion undertaken last year. On the brighter side, it said several aspects of aggregate supply conditions such as agriculture and contactless services are holding up amidst pandemic protocols. Industrial production and exports have surged on strong base effects, but there is also evidence of positive momentum.

The article, published in the RBI's monthly Bulletin, stressed that speed and scale of vaccination against COVID-19 will shape the path of economic recovery which has the resilience and the fundamentals to bounce back from the pandemic and unshackle itself from pre-existing cyclical and structural hindrances. Observing that vaccines by themselves will not end the pandemic, the article said ‘we have to learn to live with the virus, complementing vaccines with ramping up investment in healthcare, logistics and research. The pandemic is a real shock with real consequences.’

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