With the virus on the rampage, the lethal heights of the second wave will be having a dwarfing impact on Odisha's GSDP (Gross State Domestic Product). The lockdown impact on the GSDP will be bigger this time. The worse home truth is, unlike the first wave, the second wave has a disastrous impact on people's income, finds a SBI study.
The Macro Impact
The contraction of GSDP at current prices is likely to be 2.5 per cent in FY 22. The SBI forecast is the loss to GSDP in the second wave will be less than the first wave. However, the report finds high order of stress in the household sector
As per the SBI report, since the Odisha government has imposed a lockdown to control the raging pandemic, with the daily counts crossing the 10k mark in May first week, the State's GSDP will be bearing a whopping loss to the tune of Rs 14,449 crore. In percentage terms, the State will record a GSDP contraction of over 2.5 per cent at current prices.
When this is seen in the backdrop that Odisha’s real GSDP had contracted by around 5 per cent (-4.92%) in the financial year 2020-21, the loss to GSDP in the fiscal year 2021-22 looks very gloomy. Because the GDP will post a lower GSDP growth for the second consecutive time in the State. However, if the SBI's prediction is to be believed, the loss to GSDP in the second wave will not be as colossal as the first wave impact.
"Though the impact of the second wave on the real economy seems to be limited so far on paper (due to localised nature of lockdowns which has however now turned into a de facto national lockdown, a better adaptation of people to work from home protocols, increased use of e-commerce and digital payments) in comparison with the first wave," the report observed.
Household Stress High In Second Wave
In the backdrop of the Centre for Monitoring of Indian Economy's (CMIE) report that due to high job losses, 97 per cent of Indians have gone poorer in the second wave, the SBI research report adds another big dimension as it measures the widespread impact of the second wave on the people of the country.
"The alternate periods of expansion and contraction of deposits in banks show a greater deal of household stress prevailing in the country across the states during the peak month of the second wave," the report revealed.
Explaining it further, the report said, "The interesting point to note is that deposits have shown alternate periods of expansion and contraction in FY22 in first 3 fortnights. It is possible that such expansion followed by contraction could indicate household stress as people getting salary credits in the first fortnight are withdrawing it in the second fortnight for health expenses/stocking up currency for precautionary motive and an uncertain scenario and the trend continues."