Global forecasting firm Oxford Economics has lowered India's growth projections for the current financial year to 9.1 per cent from 10.2 per cent because of slow Coronavirus vaccination drive and the need to extend state-imposed lockdowns for a longer period to contain the spread of virus.
"State lockdowns are enabling India to slow the surge in Covid infections. The international experience suggests that tighter restrictions will need to remain in place until at least 28 per cent of the population has received one dose of the vaccine to contain the risks of renewed rise in cases".
"We estimate that India will reach the vaccine threshold by mid to late August, and accordingly expect restrictions will be extended into third quarter. Consequently, we have lowered our 2021 growth forecast to 9.1 per cent, from 10.2 per cent previously," Oxford Economic said in a report.
"We expect a bigger sequential contraction in second quarter and more muted recovery thereafter, with vaccination poised to undershoot the government's target of inoculating 23 per cent of the population by August by a wide margin," the global forecasting firm added.
"India's new lockdown strategy, which is being led by states, seems to be working. The sustained decline in the daily coronavirus cases at a national level, alongside a fall in the effective reproduction rate (the R-number) to below 1, suggests that India's coronavirus curve may be beginning to plateau again. But it's too early to consider exiting lockdowns. Currently, most states have decreed tighter restrictions until the end of May. We think it is likely that partial, if not complete, lockdowns will be extended into Q3," Oxford Economics said.
Commenting on current vaccination drive, Oxford Economics said that the government's target to vaccinate 30 crore citizens is looking increasingly inadequate.
"Confronted by a ferocious second wave of the coronavirus, the central government's target of vaccinating 30 crore citizens (23 per cent of the population) by August this year was already looking increasingly inadequate. But now, even this goal looks unlikely to be achieved, with supply snags and vaccine hesitancy pulling down the daily vaccination rate to just around 10 lakh doses in recent days," Oxford Economics added.