Moody's Investors Service on Wednesday slashed India's growth projection to 9.6percent for 2021 calendar year, from its earlier estimate of 13.9percent, and said faster vaccination progress will be paramount in restricting economic losses to June quarter. In its report titled 'Macroeconomics - India: Economic shocks from second COVID wave will not be as severe as last year's', Moody's said high-frequency economic indicators show that the second wave of COVID-19 infections hit India's economy in April and May.

With states now easing restrictions, economic activity in May is likely to signify the trough. "The virus resurgence adds uncertainty to India's growth forecast for 2021; however, it is likely that the economic damage will remain restricted to the April-June quarter. We currently expect India's real GDP to grow at 9.6percent in 2021 and 7percent in 2022," Moody's said.

Earlier this month, Moody's had projected India to clock a 9.3 percent growth in the current fiscal ending March 2022, but a severe second COVID wave has increased risks to India's credit profile and rated entities.

Indian economy contracted by 7.3 percent in fiscal 2020-21 as the country battled the first wave of COVID, as against a 4 percent growth in 2019-20.

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