<p class="bodytext">A month-long national lockdown to arrest the spread of Covid-19 2.0 could shave off 100-200 bps of GDP, leading to a 300 bps risk to annual growth, a brokerage report has flagged while expressing doubts over the ability of local lockdowns to control the pandemic.</p>.<p class="bodytext">The second wave of the coronavirus infection has caught the government off-guard with the daily cases jumping over 6.5 times in the past 30 days.</p>.<p class="bodytext">With close to 3.53 lakh fresh daily infections, the country is the worst-hit globally. The death toll jumped to 1,95,123 as of 8 am Monday, with a daily new peak of 2,812 deaths in the past 24 hrs, according to the government data.</p>.<p class="bodytext">"It remains to be seen if the second wave subsides without a national level lockdown. A month of nationwide lockdown costs 100-200 bps of GDP. This poses a 300 bps risk to our 9 per cent real GVA growth forecast for FY22," Bank of America Securities India economists Indranil Sen Gupta and Aastha Gudwani said in a note Monday evening.<br /><br /><strong>Read: <a href="https://www.deccanherald.com/business/economy-business/oxford-economics-lowers-indias-2021-gdp-growth-forecast-to-102-979136.html" target="_blank">Oxford Economics lowers India's 2021 GDP growth forecast to 10.2%</a></strong></p>.<p class="bodytext">Given this high economic cost, they expect the Centre and the states to try to contain the spread with further tightening of night curfews and localized lockdowns.</p>.<p class="bodytext">They also expect the Reserve Bank to come to aid by funding government's welfare measures like the resumption of free food grains to the needy in May-June, for which it needs an additional Rs 26,000 crore or 0.1 per cent of GDP, through OMOs/G-Saps and other liquidity infusing measures to arrest the rise in yields.</p>.<p class="bodytext">They expect the RBI to remain on hold in FY22 and hike rates by 100 bps in FY23.</p>.<p class="bodytext">"To slow rise in yields, we expect the RBI to conduct USD 68.7 billion of OMOs/G-Saps and hike and extend banks' HTM limits by 2 per cent of their books to FY26, and continue forward forex intervention," the brokerage said.</p>.<p class="bodytext">On the vaccination front, they said while 8.7 per cent of the total population has received the first dose, only 1.6 per cent have got both doses.</p>
<p class="bodytext">A month-long national lockdown to arrest the spread of Covid-19 2.0 could shave off 100-200 bps of GDP, leading to a 300 bps risk to annual growth, a brokerage report has flagged while expressing doubts over the ability of local lockdowns to control the pandemic.</p>.<p class="bodytext">The second wave of the coronavirus infection has caught the government off-guard with the daily cases jumping over 6.5 times in the past 30 days.</p>.<p class="bodytext">With close to 3.53 lakh fresh daily infections, the country is the worst-hit globally. The death toll jumped to 1,95,123 as of 8 am Monday, with a daily new peak of 2,812 deaths in the past 24 hrs, according to the government data.</p>.<p class="bodytext">"It remains to be seen if the second wave subsides without a national level lockdown. A month of nationwide lockdown costs 100-200 bps of GDP. This poses a 300 bps risk to our 9 per cent real GVA growth forecast for FY22," Bank of America Securities India economists Indranil Sen Gupta and Aastha Gudwani said in a note Monday evening.<br /><br /><strong>Read: <a href="https://www.deccanherald.com/business/economy-business/oxford-economics-lowers-indias-2021-gdp-growth-forecast-to-102-979136.html" target="_blank">Oxford Economics lowers India's 2021 GDP growth forecast to 10.2%</a></strong></p>.<p class="bodytext">Given this high economic cost, they expect the Centre and the states to try to contain the spread with further tightening of night curfews and localized lockdowns.</p>.<p class="bodytext">They also expect the Reserve Bank to come to aid by funding government's welfare measures like the resumption of free food grains to the needy in May-June, for which it needs an additional Rs 26,000 crore or 0.1 per cent of GDP, through OMOs/G-Saps and other liquidity infusing measures to arrest the rise in yields.</p>.<p class="bodytext">They expect the RBI to remain on hold in FY22 and hike rates by 100 bps in FY23.</p>.<p class="bodytext">"To slow rise in yields, we expect the RBI to conduct USD 68.7 billion of OMOs/G-Saps and hike and extend banks' HTM limits by 2 per cent of their books to FY26, and continue forward forex intervention," the brokerage said.</p>.<p class="bodytext">On the vaccination front, they said while 8.7 per cent of the total population has received the first dose, only 1.6 per cent have got both doses.</p>