Russian helicopter crashes in Syria, killing both pilots: agencies

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.

Washington DC, May 19: US President Donald Trump has threatened to permanently halt funding for the World Health Organisation (WHO) if it did not commit to improvements within 30 days, and to reconsider the membership of the United States in the global health body.

On Monday, Trump wrote a letter to WHO Director-General Tedros Ghebreyesus that read, "If WHO doesn't commit to major substantive improvements within the next 30 days, I will make my temporary freeze of US funding to WHO permanent and reconsider our membership in the organisation."

Trump had temporarily suspended US' contribution to the WHO last month, accusing it of promoting China's "disinformation" about the coronavirus outbreak, although WHO officials denied the accusation and Beijing said that it was transparent and open.

"The only way forward for the WHO is if it can actually demonstrate independence from China. My administration has already started discussions with you on how to reform the organisation. But action is needed quickly. 

We do not have time to waste," Trump said in the letter.

"I cannot allow American taxpayer dollars to continue to finance an organisation that, in its present state, is so clearly not serving America's interests," he added.

On Monday, the WHO said that an independent review of the global coronavirus response would begin at the earliest and it received backing from China, where the virus was first discovered.

Ramallah, Jul 2: Several world countries renew a call for Israel to halt contentious plans to annex parts of the occupied Palestinian territory after the regime delayed the implementation of the land garb bid in the face of a series of stumbling blocks, including internal rifts, global criticisms and the US’s failure to give Tel Aviv the go-ahead for the move.

Israel's ruling coalition, led by Prime Minister Benjamin Netanyahu, had announced July 1 as the date to begin moving forward with the plan to impose Tel Aviv’s “sovereignty” over about a third of the West Bank, including settlements and the fertile Jordan Valley.

Without clarifications, the regime, however, failed to launch the scheme on the set date amid widening differences between Netanyahu and his coalition partner, minister of military affairs Benny Gantz.

Meanwhile, there are signs that the administration of US President Donald Trump, a staunch Israel supporter, has cooled its backing for the Israeli move amid what is believed to be troubles at home and fears that it might hurt the president’s chances of re-election besides international pressure.

On Wednesday, Netanyahu's office said in a statement that he would continue to discuss a possible West bank annexation with the US administration.

“In the coming days there will be additional discussions,” the statement said.

Labor, Social Affairs and Social Services Minister Ofir Akunis said the Israel would annex portions of the West Bank in July but only after the US president issued a declaration on the matter.

The annexation “will only happen after a declaration by Trump,” he told Israeli Army Radio.

Trump had already given Tel Aviv the green light for the land grab in his self-proclaimed “deal of the century,” which was unveiled in January with the aim of re-drawing the Middle East map.

However, the Trump administration has so far refrained from offering official support for the annexation sought by Netanyahu and his right-wing allies.

Unlike the US, several countries, including some of Israel’s allies, have expressed their opposition to Israel’s planned push to consolidate its occupation of Palestine.

Germany passes anti-annexation resolution

On Wednesday, the German parliament approved a resolution calling on the government to dissuade Israel from annexing the West Bank.

The motion, which was brought in the German legislature by the three parties in Chancellor Angela Merkel's coalition, was approved without opposing votes. 

Berlin should use its “special relations and contacts [with Tel Aviv] to express to the Israeli government our concerns and our urgent demand to refrain from an annexation of parts of the West Bank and from the continued expansion of settlements, both of which contradict international law,” read the resolution.

Speaking at the parliamentary debate before the vote, German Foreign Minister Heiko Maas said, “We reject unilateral changes of borders, and we won’t recognize them.”

He also stressed that peace “cannot be achieved through unilateral steps but only through serious negotiations.”

France warns of consequences

Similarly, French Foreign Minister, Jean-Yves Le Drian warned that any Israeli annexation would be a violation of international law and would bring about consequences.

“Annexation of Palestinian territories, whatever the perimeters, would seriously throw into question the parameters to resolve the conflict,” he told a parliamentary hearing. 

The top diplomat added, “An annexation decision could not be left without consequences and we are examining different options at a national level and also in coordination with our main European partners.”

Australia raises concerns

Additionally, Australian Foreign Minister Marise Payne voiced worries about the Israeli scheme, saying she had directly expressed this view to Israeli Foreign Minister Gabi Ashkenazi.

“We are following with concern possible moves towards the unilateral annexation or change in status of territory on the West Bank,” she said in a statement.

“The focus needs to be on a return to direct and genuine negotiations between Israel and the Palestinians for a durable and resilient peace arrangement, as soon as possible,” Payne added.

Vatican summons US, Israeli envoys

Meanwhile, the Vatican announced on Wednesday that it had summoned the American and Israeli ambassadors to protest Israel’s annexation bid.

In separate meetings, Vatican Secretary of State Cardinal Pietro Parolin told Israeli Ambassador Oren David and US Ambassador Callista Gingrich of concerns “regarding possible unilateral actions that may further jeopardize the search for peace between Israelis and Palestinians, as well as the delicate situation in the Middle East,”

“As already declared … the Holy See reiterates that ... Israel and the State of Palestine have the right to exist and to live in peace and security, within internationally recognized borders,” the Vatican said in a statement.

“It thus appeals to the parties to do everything possible to reopen the process of direct negotiation, on the basis of the relevant Resolutions of the United Nations,” it added.

Amnesty urges firm action

Amnesty International called on the international community to take firm action against Israel’s annexation plan and its “law of the jungle” mentality.

“Members of the international community must enforce international law and restate that annexation of any part of the occupied West Bank is null and void,” said Saleh Higazi, deputy regional director for Amnesty Middle East and North Africa.

“They must also work to immediately stop the construction or expansion of illegal Israeli settlements and related infrastructure in the Occupied Palestinian Territories as a first step towards removing Israeli civilians living in such settlements,” he added.

Palestinians mark ‘Day of Rage'

Also on Wednesday, Palestinians held “Day of Rage” rallies both in the West Bank and the Gaza Strip against the Israeli expansionism.

In Gaza city, several thousand protesters gathered, some brandishing Palestinian national flags and placards condemning Trump.

Some demonstrators carried signs in English reading, “We Can’t Breathe Since 1948” and “Palestinian Lives Matter,” in reference to the American Black Lives Matter movement.

“The occupation has killed us and killed our children and deprived us of a good life. May God grant the Resistance victory,” a protester told the al-Aqsa TV.

“The resistance must be revived,” Gaza protester Rafeeq Inaiah told media persons. “Israel is afraid of force.”

Similar demonstrations also took place in the West Bank cities of Ramallah and Jericho.