ExplainSpeaking on economy: Why unemployment could become a bigger headache for government -Udit Misra
-The Indian Express
Rapid spread of Covid-19 and inadequate spending by government could result in India suffering a permanent loss of Rs 30 lakh crore, which is roughly the size of the Union Budget for 2020-21
This week started with several economists coming out with their revised GDP growth expectations for India in response to the official GDP growth data that was released on August 31. With the economy shrinking more than what most analysts expected, the revisions — be it India Ratings and Research, Goldman Sachs, ICRA or Crisil — were all in the negative direction.
For instance, Crisil in its September update (over the May assessment) stated the following two main reasons: “With the pandemic’s peak not yet in sight and the government not providing adequate direct fiscal support, the downside risks to our earlier forecast have materialised”.
In other words, in May, the two things Crisil analysts feared may go wrong have gone wrong.
One, Covid continues to spread unabated. Look at the three India maps (Source: Crisil) with the number of districts reporting more than 1,000 cases. See how rapidly the whole country is now getting afflicted. As of the latest data, India is adding close to 1 lakh cases every single day.
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The Indian Express, 13 September, 2020, https://indianexpress.com/article/explained/why-unemployment-could-become-a-bigger-headache-for-government-explainspeaking-6593923/