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New Delhi, May 27: India’s fourth recession since Independence, first since liberalisation, and perhaps the worst to date is here, according to rating agency, Crisil.

CRISIL sees the Indian economy shrinking 5 per cent in fiscal 2021 (on-year), because of the Covid-19 pandemic. The first quarter will suffer a staggering 25 per cent contraction.

About 10 per cent of gross domestic product (GDP) in real terms could be permanently lost. "So going back to the growth rates seen before the pandemic is unlikely in the next three fiscals", Crisil said.

Crisil has revised its earlier forecast downwards. "Earlier, on April 28, we had slashed our prediction to 1.8 per cent growth from 3.5 per cent growth. Things have only gone downhill since", it said.

While we expect non-agricultural GDP to contract 6 per cent, agriculture could cushion the blow by growing at 2.5 per cent.

In the past 69 years, India has seen a recession only thrice as per available data in fiscals 1958, 1966 and 1980. The reason was the same each time a monsoon shock that hit agriculture, then a sizeable part of the economy.

"The recession staring at us today is different," it added. For one, agriculture could soften the blow this time by growing near its trend rate, assuming a normal monsoon. Two, the pandemic-induced lockdowns have affected most non-agriculture sectors. And three, the global disruption has upended whatever opportunities India had on the exports front.

Economic conditions have slid precipitously since the April-end forecast of 1.8 per cent GDP growth for fiscal 2021 (baseline), Crisil said.

On the lockdown extension, it said that the government has extended the lockdown four times to deal with the rising number of cases, curtailing economic activity severely (lockdown 4.0 is ending on May 31).

The first quarter of this fiscal will be the worst affected. June is unlikely to see major relaxations as the Covid-19 affliction curve is yet to flatten in India.

"Not only will the first quarter be a washout for the non-agricultural economy, services such as education, and travel and tourism among others, could continue to see a big hit in the quarters to come. Jobs and incomes will see extended losses as these sectors are large employers," Crisil said.

CRISIL also foresees economic activity in states with high Covid-19 cases to suffer prolonged disruption as restrictions could continue longer.

A rough estimate based on a sample of eight states, which contribute over half of India's GDP, shows that their 'red zones' (as per lockdown 3.0) contributed 42 per cent to the state GDP on average regardless of the share of such red zones.

On average, the orange zones contribute 46 per cent, while the green zones where activity is allowed to be close to normal contribute only 12 per cent to state GDP.

The economic costs are higher than earlier expectations, according to Crisil. The economic costs now beginning to show up in the hard numbers are far worse than initial expectations.

Industrial production for March fell by over 16%. The purchasing managers indices for the manufacturing and services sectors were at 27.4 and 5.4, respectively, in April, implying extraordinary contraction. That compares with 51.8 and 49.3, respectively, in March.

Exports contracted 60.3 per cent in April, and new telecom subscribers declined 35 per cent, while railway freight movement plunged 35 per cent on-year.

"Indeed, given one of the most stringent lockdowns in the world, April could well be the worst performing month for India this fiscal," it said.

Added to that is the economic package without enough muscle. The government recently announced a Rs 20.9 lakh crore economic relief package to support the economy. The package has some short-term measures to cushion the economy, but sets its sights majorly on reforms, most of which will have payoffs only over the medium term.

"We estimate the fiscal cost of this package at 1.2 per cent of GDP, which is lower than what we had assumed in our earlier estimate (when we foresaw a growth in GDP)," it said.

"We believe a catch-up to the pre-crisis trend level of GDP growth will not be possible in the next three fiscals despite policy support. Under the base case, we estimate a 10 per cent permanent loss to real GDP (from the decadal-trend level), assuming average growth of about 7 per cent between fiscals 2022 and 2024," Crisil said.

Interestingly, after the Global Financial Crisis (GFC), a sharp growth spurt helped catch up with the trend within two years. GDP grew 8.2 per cent on average in the two fiscals following the GFC. Massive fiscal spending, monetary easing and swift global recovery played a role in a V-shaped recovery.

To catch-up would require average GDP growth to surge to 11 per cent over the next three fiscals, something that has never happened before.

The research said that successive lockdowns have a non-linear and multiplicative effect on the economy a two-month lockdown will be more than twice as debilitating as a one-month imposition, as buffers keep eroding.

Partial relaxations continue to be a hindrance to supply chains, transportation and logistics. Hence, unless the entire supply chain is unlocked, the impact of improved economic activity will be subdued.

Therefore, despite the stringency of lockdown easing a tad in the third and the fourth phases, their negative impact on GDP is expected to massively outweigh the benefits from mild fiscal support and low crude oil prices, especially in the April-June quarter. "Consequently, we expect the current quarter's GDP to shrink 25 per cent on-year," it said.

Counting lockdown 4.0, Indians have had 68 days of confinement. S&P Global estimates that one month of lockdown shaves 3 per cent off annual GDP on average across Asia-Pacific.

Since India's lockdown has been the most stringent in Asia, the impact on economic growth will be correspondingly larger.

Google's Community Mobility Reports show a sharp fall in movement of people to places of recreation, retail shops, public transport and workplace travel. While data for May shows some improvement in India, mobility trends are much below the average or baseline, and lower compared with countries such as the US, South Korea, Brazil and Indonesia.

Bengaluru, Apr 11: Former prime minister H D Deve Gowda claimed the lockdown decision was taken in 'haste' without forethought because of which farmers and the working class were 'suffering' and suggested measures to mitigate the impact. The state government should have consulted experienced citizens, officials, progressive farmers, farmer organisations and wholesale traders about the pros and cons before lockdown, he said in a letter to Chief Minister B S Yediyurappa, while highlighting that 61 per cent of the state's population depended on agriculture.

Because of the "hasty decision taken without any preparations", farmers of the country and the state are facing financial distress," he said in the April 9 letter, a copy of which was released to media here on Friday. The JD(S) patriarch suggested taking up some measures, including ensuring no restrictions on agriculture activities, procurement of horticulture produce at a fair price, relaxing export curbs on it, to provide relief to farmers, agriculture labourers, and daily wage workers.

On Sunday, Gowda had said he has assured Prime Minister Narendra Modi of his support in the nation's battle against COVID-19 pandemic when the latter called him to discuss the situation. In his letter to the chief minister, Gowda said: "...the lockdown implemented to control the spread of coronavirus has led our farmers into despair and put their lives into a burning fire.

This lockdown looks like a decision taken at haste without proper thinking and forethought for our farmers, agriculture labourers, and daily wage workers." He said the lockdown decision was taken after remaining 'quite' for about two months since the first corona infection was reported in the country on January 30. Among the suggestions made by the former prime minister include, procurement of horticulture produce at a fair price like in the case of milk from villages by the government through related organisations like Karnataka Horticulture Federation, HOPCOMS among others.

As horticulture produce was perishable, there should be no restriction on its procurement, transportation and marketing; all processing related activities of horticulture produce should be given relaxation from the lockdown, he said. Gowda also called for relaxation on exports for horticulture produce and its processed items. There should be no restriction on agriculture activities; a national grid has to be set up for marketing of horticulture produce, he said.

If such measures were not taken up immediately, the government will have to pay compensation to farmers for losses. Lack of remedial measures would lead to a shortage of supply, leading to rebellion from the people and may result in farmers' suicides and bringing about a situation that might be more grave than coroanvirus, he said.

The deadly coronavirus that entered India while there was still nip in the air has beaten rising mercury, humid conditions, unique Indian genome and has entered monsoon season with more potency as fresh cases are only breaking all records in the country.

India recorded a single-day spike of record 24,850 new coronavirus cases on Sunday, taking its total tally to 6.73 lakh corona-positive cases.

Top Indian microbiologists were hopeful in March that after the 21-day lockdown, as summer approaches, the rise in temperature would play an important role in preventing the drastic spread of COVID-19 virus in India.

Several virologists hinted that by June this year, the impact of COVID-19 would be less than what it appeared in March-April.

The claims have fallen flat as the virus is mutating fast, becoming more potent than ever.

According to experts, the novel coronavirus is a new virus whose seasonality and response to hot humid weather was never fully understood.

"The theory was based on the fact that high temperatures can kill the virus as in sterilisation techniques used in healthcare. But these are controlled environment conditions. There are many other factors besides temperature, humidity which influence the transmission rate among humans," Dr Anu Gupta, Head, Microbiologist and Infection Control, Fortis Escorts Heart Institute, told IANS.

There is no built-up immunity to COVID-19 in humans.

"Also, asymptomatic people might be passing it to many others unknowingly. New viruses tend not to follow the seasonal trend in their first year," Gupta emphasized.

Globally, as several countries are now experiencing hot weather, the World Health Organization (WHO) reported a record hike in the number of coronavirus cases, with the total rising by 2,12,326 in 24 hours in the highest single-day increase since COVID-19 broke out.

So far over 11 million people worldwide have tested positive for the disease which has led to over 5,25,000 deaths, according to data from Johns Hopkins University. The US remained the worst-hit country with over 28 lakh cases, followed by Brazil with 15.8 lakh.

According to Sandeep Nayar, Senior Consultant and HOD, Respiratory Medicine, Allergy & Sleep Disorders, BLK Super Speciality Hospital in New Delhi, whether temperature plays a role in COVID-19 infection is highly debated.

One school of thought said in the tropical regions of South Asia, the virus might not thrive longer.

"On the other hand, another school of thought has found that novel Coronavirus can survive in a hot and humid environment and tropical climate does not make a difference to the virus. According to them, this is what distinguishes the novel coronavirus from other common viruses, which usually wane in hot weather," stressed Nayar.

Not much has been studied in the past and no definite treatment or vaccine is available to date.

"Every day, new properties and manifestation of the disease come up. As of now, the only way to prevent this monster is by taking appropriate precautions. Hand hygiene, social distancing, cough etiquette and face masks definitely reduce spread of COVID-19 infection," Nayar told IANS.

Not just top Indian health experts, even Indian-American scientists had this theory in mind that sunshine and summer may ebb the spread of the coronavirus.

Ravi Godse, Director of Discharge Planning, UPMC Shadyside Pennsylvania in the US told IANS in April: "In the summer, the humidity can go up as well, meaning more water drops in the air. If the air is saturated with water and somebody sneezes virus droplets into such air, it is likely that the droplets will fall to the ground quicker, making them less infectious. So the short answer is yes, summer/sunshine could be bettera.

According to Dr Puneet Khanna, Head of Respiratory Medicine and Pulmonology, Manipal Hospital, Delhi, COVID-19 death rates are not too different in tropical countries but since the disease affected them late it was yet to show its peak in these areas.

"The virus can survive well in hot and humid countries and this is proven now," he stressed.