(Video) Rajya Sabha TV (RSTV) The Big Picture: Impact of second wave on economy

Topic: Impact of second wave on economy

Guest:

Yaduvendra Mathur (Former Special Secretary, NITI Aayog)
Sidhartha (National Economic Editor, TOI)

Topic Description:

As the second wave of COVID-19 continues unabated, inducing lockdowns in many parts of the country, the finance ministry said on Friday that it has posed a downside risk to economic activity in the first quarter of this financial year. Although, it added that the damage will not be as severe as was seen during the first wave of the pandemic last year. In its monthly economic report the finance ministry said the fiscal position of the central government has witnessed an improvement in recent months with a revival in economic activities during the second half of the Financial year 2020-21.As per provisional figures, net direct tax collections for 2020-21 are 4.5% higher than Revised Estimates and 5% higher than collections in 2019-20.GST mop-up registered a good growth and collections exceeded Rs 1 lakh crore in each of the last six months owing to economic recovery, GST revenue registered another record high of Rs 1.41 lakh crore in April, indicative of continual economic recovery.However, the finance ministry noted in its report that the second wave of the pandemic hit the market sentiment as Nifty 50 and the S&P BSE Sensex recorded losses of 0.4 per cent and 1.5 per cent, respectively in April. Also the rupee depreciated by 2.3 per cent in April. The domestic financial conditions, nevertheless, continue to remain comfortable with RBI’s support to liquidity, with open market operations worth Rs 3.17 lakh crore carried out in 2020-21, as per the Finance Ministry’s Report.