InvestorQ : With the COVID cases rising in India, what are the big economic challenges for the Indian government?
Arti Chavan made post

With the COVID cases rising in India, what are the big economic challenges for the Indian government?

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Rutuja Nigam answered.
2 weeks ago
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Broadly, the Indian government could have 4 economic challenges, both direct and indirectly as a result of the COVID resurgence.

· India needs to product enough vaccines to inoculate the entire population twice over. That would include getting vaccine inputs released from the US and also speedy approvals for the Sputnik-V and the J&J vaccine.

· Logistics for vaccine distribution is the next challenge. The big takeaway is that in such cases push strategy works a lot better than a pull strategy. The idea is to stress on mandatory inoculation and speed of execution.

· An indirect economic challenge is rising inflation. It is just getting tougher to control inflation. COVID resurgence could mean return of supply side bottlenecks. That is evident from core inflation at a 29-month high of 5.96%.

· Finally, there is the FY22 GDP challenge. If real GDP must grow at 12-13% in FY22, COVID resurgence has to be nipped in the bud. Anything lower than 12% GDP growth in FY22 means we lose the edge to China and valuations look expensive once again.

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