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Domestic credit ratings agency Crisil has cut India’s gross domestic product (GDP) growth forecast to 9.5 per cent for the current fiscal (FY22) as compared to 11 percent projected earlier due to the hit to private consumption and investments following the second wave of COVID-19. It joins other watchers who have cut their FY22 growth projections, with some pegging it as low as 7.9 percent. The economy had contracted by 7.3 percent in FY21.

It also said downward revision is premised on the clearly evident hit to the two engines of growth -- private consumption and investment -- by the second wave. It noted that daily cases have mercifully peaked, but states will be cautious about unlocking anytime soon owing to risks of another wave and tardy vaccinations. It underlined that this is unlike what was witnessed after the first wave last fiscal, when a largely uniform and calibrated reopening spurred quite a sharp recovery.

The agency further said it has assumed that COVID-19 restrictions will continue and mobility will remain affected in some form or other, at least till August, adding that the pace of recovery will also be a function of how the vaccination drive progresses in the coming months. It also said a third wave would pose a significant downside risk to the growth forecast, as would a slower-than-anticipated pace of vaccination. In such a pessimistic case, it sees GDP growing at 8 percent.