3-week lockdown may have cost India Rs 7-8 lakh crore

The three-week coronavirus-induced lockdown across India may have cost the national economy Rs 7-8 lakh crore, analysts and industry bodies said.

Prime Minister Narendra Modi had announced a nationwide complete lockdown from March 25 that brought 70 percent of economic activity, investment, exports and discretionary consumption to a standstill, reports our New Delhi correspondent.

Only essential goods and services such as agriculture, mining, utility services, some financial and IT services and public services were allowed to operate during the 21-day shutdown.

Stating that the pandemic came at the most inopportune time for India whose economy was showing signs of recovery after bold fiscal and monetary measures, Centrum Institutional Research said the country again stares at the possibility of low single-digit growth for FY2021 (April 2020 to March 2021).

"Nationwide complete lockdown is likely to shave off at least Rs 7-8 trillion," it said.

Acuite Ratings & Research Ltd earlier this month estimated that the lockdown will cost the Indian economy almost USD 4.64 billion (over Rs 35,000 crore) every day and the entire 21-day lockdown will result in a GDP loss of almost USD 98 billion (about Rs 7.5 lakh crore).

The sectors that are most severely impacted are transport, hotel, restaurant, and real estate activities.

All India Motor Transport Congress (AIMTC) secretary-general Naveen Gupta said the accumulated losses to truckers during the first 15 days of lockdown were about Rs 35,200 crore given an average Rs 2,200 loss to per truck per day.

"More than 90 percent of the about one crore trucks in the country are off roads during the lockdown as truckers with only essential commodities are on the move," reports our New Delhi correspondent quoting him as saying.

"Even if the lockdown is lifted, it will take at least two to three months for truckers to limp to some normal scale as we apprehend consumption of non-essential items to remain hit on the account of lack of purchasing power," he added.

AIMTC represents about 93 lakh transporters and truckers and is their umbrella body.

National Real Estate Development Council, a body of realtors, puts the loss in the sector at Rs 1 lakh crore.

World Bank on Sunday said India's economy is expected to grow 1.5 percent to 2.8 percent in 2020-21 fiscal which started on April 1, the slowest growth rate recorded since the economic reforms of 1991.

Asian Development Bank (ADB) sees India's economic growth slipping to 4 percent in FY21, while S&P Global Ratings has further slashed its GDP growth forecast for the country to 3.5 percent from a previous downgrade of 5.2 percent.

Fitch Ratings puts its estimate for India's growth at 2 percent while India Ratings & Research has revised its FY21 forecast to 3.6 percent from 5.5 percent earlier.

Moody's Investors Service has slashed its estimate of India's GDP growth during the 2020 calendar year to 2.5 percent, from an earlier estimate of 5.3 percent.