India must not chase dream of another V-shaped recovery in Covid carnage

Country's current strategy for demand revival is flawed as a second wave of Covid-19 infections has been more hurtful.

The V-shaped economic recovery that India’s policy makers obsessed over in 2020 did eventually materialize. It won’t be repeated after this year’s Covid-19 carnage.

To see why, start with the fading momentum. Government statistics released Monday showed 1.6% growth in gross domestic product from a year earlier in the March quarter, before a deadly second wave of infections. But this expansion, an improvement over the 0.5% rate in the previous three months, is a statistical artifact. A better metric is seasonally adjusted quarter-on-quarter growth, which Capital Economics calculates at 0.7%, a sharp — though largely expected — slowdown from 9.5%