Updated: April 24, 2021 9:07:24 am
The stringent curfews and lockdowns imposed by several states will lead to a loss of Rs 1,50,000 crore for the country, according to a report by State Bank of India (SBI). Of the total loss estimated at Rs 1.5 lakh crore, Maharashtra, Madhya Pradesh and Rajasthan account for 80 per cent of the loss, the research report said.
Maharashtra, which has put up a stringent lockdown when compared to other states, accounts for 54 per cent of the loss. “Being the economically biggest and most industrialised state in India, this lockdown will have huge impact on growth,” SBI said.
“Currently, we estimate a loss of around Rs 82,000 crore for Maharashtra which will definitely increase if restrictions are further tightened. It may be pertinent to ask that how much lockdown will slow down the speed of infections, but for beefing up health infrastructure,” the report said.
SBI also lowered the gross domestic product (GDP) estimates for fiscal 2021-22. The revised FY22 projection now stands at 10.4 per cent for real GDP (earlier 11 per cent) and 14.3 per cent for nominal GDP (earlier 15 per cent).
As per the SBI report, migration of labour is continuing unabated. Data provided by Western Railways (for April 1-12) says that almost 4.32 lakh people have returned to states like Uttar Pradesh, West Bengal, Bihar, Assam and Odisha from Maharashtra. Of the 4.32 lakh people, around 3.23 lakh reverse migrated to UP and Bihar alone. “From Central Railways, our estimate indicates that around 4.7 lakh reverse migrated to northern and eastern states from Maharashtra,” the report said.
It added that the SBI business activity index showed a fall in activity in April, with the latest reading for the week ended April 19 of 86.3. This is the lowest in five months (November 16, 2020 when the value declined to 85.7). All the indicators have shown a dip, with maximum decline in apple mobility, weekly food arrival at mandis and RTO revenue collection.
Meanwhile, bank credit growth fell to a 59-year low of 5.6 per cent in FY21, against 6.1 per cent growth in 2019-20. On the other hand, deposits increased to 11.4 per cent in FY21, compared to 7.9 per cent growth in FY20.
“In FY21 April-May, huge monthly incremental increase in deposits was observed (particularly time deposits) as people had less options to spend due to nationwide lockdown. This time also we expect large traction in time deposits as most of the states imposed partial lockdowns,” SBI said.
Meanwhile, early trends of around 45 listed entities suggested 10 per cent growth in top line for listed entities, while EBITDA and PAT (profit after tax) grew by 16 per cent and 26 per cent in Q4 of FY21 compared to Q4 of FY20.
Entities with turnover of less than Rs 100 crore reported 6 per cent growth in net sales and negative PAT, despite cut in employee expenses by 10 per cent. In the commercial paper market, yield continues to be below 4 per cent and fell to 3.71 per cent in April against 4.35 per cent this March.
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