Fitch now expects lower GDP contraction in India at 9.4% for FY21

Says Covid vaccines aren't likely to reach majority even in a year, Cautions against weak balance sheets, challenges in financial sector

A sharper-than-expected rebound by India's economy in the second quarter has prompted Fitch Ratings to lower its projections for GDP contraction to 9.4 per cent in the current financial year from 10.5 per cent forecast earlier. 

However, the agency warned against weak investment demand with Covid-19 affecting the economy and asset quality in the financial sector deteriorating and holding back credit growth. 

Even as India pre-ordered 1.6 billion vaccine doses, it does not seem that the majority of people would get them even in 12 months, Fitch apprehended. It also said regional lockdowns are likely for few more months as