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The status of Covid19 may no longer be that of a pandemic anymore. A large majority of countries have seen significant decline in the number of active patients, after having experienced the peak of infection cases. The fatality rate has declined materially, especially due to acceleration in the vaccination drive. However, in past few weeks, many countries in the world have seen reemergence of Covid19 cases in some clusters. Scientists are claiming that the rise in number of cases may be due to mutated variants of the Sars-CoV-2 virus. A fear has been expressed that we may soon see a third wave of the pandemic, primarily due to the emergence of new variants of Sars-CoV-2 virus, some of which might be immune to the vaccines available presently or the doses of vaccine being administered presently. The pandemic has changed a lot of things in past one year. The lockdown and mobility restrictions have materially impacted our personal, social, and economic lives. There is a great deal of ...

In past couple of months a number of research reports have expressed concerns over the rural demand in the wake intense second wave of pandemic and subsequent lockdown of economic activities. Some consumer facing corporates have also expressed similar sentiment in their interaction with analysts and investors. The popular views seems to be that unlike last summer, when the rural demand remained resilient despite a wider and stringent lockdown, this year the demand may not show similar resilience. Wider and deeper spread of infection this time is one of the primary reasons behind these concerns. Rising stress in household and unorganized sector is also expected the discretionary spending in check. In this context, there are few points that need to be noted by investors before forming a negative view on consumption theme. Record production in crop year 2020-2021 Firstly, as per the third advance estimates for the 2020-2021 crop year, the agriculture ministry has expected record foo...

The present trends indicate that the Second wave of Covid19 pandemic in India may have peaked in most of the states. In the rest of the country, it is expected to peak in next 4-6 weeks. This should ease the pressure on healthcare ecosystem and bring some relief to the panicked citizens. The government sources have indicated that India will have enough supply of Covid19 vaccines by end of 2021, and most of the population will be inoculated by the end of FY22. Various scientists have cautioned that we may see another wave of pandemic. However, the global experience so far is that any further spurts in the intensity of the pandemic may not be as devastating as the second wave due to better immunity and preparation of citizens against the virus; and improved healthcare ecosystem. This immunity could develop due to vaccination, infection in earlier waves and/or life style improvements induced by pandemic itself. The greater awareness amongst citizens and healthcare professionals may also...

May 2021 Bulletin of the Reserve Bank of India , carries some useful insights about the performance of NBFCs during the pandemic. Being a critical source of consumer and MSME finance, performance of NBFCs is usually a broad indicator of the consumption demand, and consumer and business sentiments. The key highlights of the NBFCs performance, especially during 2H2020, are noted as follows: ·          Pandemic has hit NBFCs hard. “The impact of the pandemic can be seen on both asset quality and liquidity, although the latter was addressed to a considerable extent through timely policy measures.” ·          An unfavourable mix of COVID-19, sell-offs in financial markets and the abrupt winding-up of specific schemes by a mutual fund contributed to NBFCs facing record spike in yields on their debt in Q1: 2020-21. The sharp market differentiation continued between the highly rated and other NBFCs, notwithsta...

 The localized lockdown and mobility restrictions in past 6weeks have led to scaling down of FY22 GDP growth estimates. The new estimates mostly imply that Indian economy may record marginally negative growth during two period from April 2020 to March 2022. These estimates though assume (i) No community transmission of infections; (ii) no nationwide lockdown; (iii) no wider shutdown of industries and construction work; and (iv) normalization of mobility restriction in 2HFY22. Any further worsening of pandemic situation may lead to further downgrade of growth estimates resulting in spillover impact over FY23 as well. The global rating agency S&P, recently published a note saying, “The possibility the government will impose more local lockdowns may thwart what was looking like a robust rebound in corporate profits, liquidity, funding access, government revenues, and banking system profitability.” The note further stated that agency is “looking at two scenarios, both entailing a...