The Covid 19 induced lockdown and other restrictions in India could lead to a nominal GDP loss of up to Rs 6 lakh crore during the first quarter of the current financial year as compared to a loss of Rs 11 lakh crore in the corresponding period of the previous financial year, a State Bank of India report said.

The report added that the real GDP loss is likely to be in the range of Rs 4-4.5 lakh crore and hence real GDP growth would be in the range of 10-15 per cent.

The economic impact has been less brutal due to better adaptation of work from home protocols and an increased use of digital payments in comparison with the first wave that hit India last year. However, the worry is spread of the virus this time in the rural sector and the sequential momentum of leading indicators is at all-time low.

The share of rural districts in new cases is rising quite rapidly, even though overall cases have started to decline from the second week of May. It has increased from 45.5 per cent in end-April to 53.6 per cent as per the latest data. Notably, this is same as the peak of 53.7 per cent observed during August end.

The Top 20 rural districts now account for around 15 per cent of country-wise new cases with hinterlands of Andhra Pradesh, Maharashtra and Karnataka continuing to be the worst affected, the SBI report noted.

“We believe that in this wave our health crisis has overwhelmed us and hence the impact on GDP in the second wave will be more from health channel than the mobility channel,” the report said.