Covid 19

Accordingly, out of thirteen issuer downgrades by credit rating agencies during Q1FY22 in the financial sector, ten issuers are smaller MFI and NBFCs engaged in providing unsecured MSME loans, personal and vehicle loans. A report by Acuite Ratings said that collection efficiencies which were seen recovering above 90 per cent in Mar-21 have dropped to between 65-85 per cent levels during Q1FY22.

The S&P BSE Sensex closed at 52,386.19 points, lower by 182.75 points, or 0.35 per cent, from its previous close. "The domestic market continued to be under the grip of bears following weak Asian peers as investor confidence was shattered due to the global spread of Delta virus variant. The equity market is turning risk-averse and side-lined," Geojit Financial Services Head of Research Vinod Nair said.

Addressing a press conference here, newly-appointed Union Health Minister Mansukh Mandaviya said: "Rs 23,000 crore package to be given to deal with the problems that occurred in the second wave of Covid-19. The package will be used jointly by the Central and state governments." He said the Centre will share Rs 15,000 crore while the state governments will share Rs 8,000 crore of the said package.

A total of 21,839 new units were launched in these markets during April-June, lower by 59 per cent compared to the launches in January-March. New launches show an increase of 74 per cent. With most states announcing relaxations in travel movements amid a dip in the number of daily new infections, the month of June has seen a pick-up in demand in real estate, showed the report by PropTiger.com.

Besides, the survey data indicated that services firms endured further losses of new business as the emergence of the pandemic and the reintroduction of containment measures restricted demand. Consequently, the seasonally adjusted India Services Business Activity Index contracted to 41.2 (index value) in June, down from 46.4 reported in May.

Says Anuj Sethi, Senior Director, CRISIL Ratings, "Revenue this fiscal will only be 70-75 per cent of the pre- pandemic level (60 per cent in fiscal 2021). Moreover, unlike the first wave that had higher impact in Tier-1 cities, the second wave has spread in Tier-2 and 3 cities and rural areas as well, resulting in a similar impact on departmental and value fashion retailers."

The PMI had averaged 51.5 in the opening quarter of fiscal year 2021-22, the lowest three-month figure since the same period one year ago. Accordingly, the headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) fell to 48.1 (index reading) in June as against a reading of 50.8 in May.

"In view of the surging demand for World Bank vaccine finance, I am pleased to announce today that the World Bank is expanding its financing available for Covid-19 vaccine financing to $20 billion over the next 18 months, adding $8 billion to the previously announced $12 billion," said David Malpass, World Bank Group President David Malpass, in the statement.

According to the consultancy firm's June edition of Economy Watch: "The primary focus of the fiscal stimulus package should be on the health sector. "This could ensure meeting the short-term healthcare demand arising from Covid's second wave and a possible third wave besides supporting growth and employment in the economy."

This would mean that fiscal deficit that is budgeted at 6.8 per cent of the GDP for FY22 may rise to 7.3 - 7.4 per cent level as a direct result of the stimulus that also includes subsidy increase for food and fertiliser sectors. "The fiscal impact of announcements made yesterday and earlier is not linear as substantial portion of the package is contingent liabilities.