The ongoing second wave of COVID-19 will dampen the pace of recovery for corporate India and the contact-intensive sectors will be hit the most, the Information and Credit Rating Agency ( ICRA)said on Wednesday.

However, the impact of the second wave on many sectors is set to be lower than the first because the lockdowns are less widespread and stringent as of now as against the strong nationwide lockdown last year which brought all economic activities to a grinding halt, the agency said.

 The country has been reporting alarmingly high cases of infections at over 3 lakh additions and 2,000 fatalities a day, for the last few days. Allegations of under-reporting by some states are also rampant, and the country has had to depend on major world powers for help. The rating agency said it expects only 4% of its rated portfolio to be severely impacted as a result of the second wave as against 17% in the first wave last year.

"With the fresh uncertainties wrought by the second wave of the pandemic, and the likelihood of additional support measures being limited, the credit ratio is now likely to stall. The pace of recovery would undoubtedly be arrested by the recent surge in COVID-19 infections and associated localised restrictions," its president Ramnath Krishnan said. The extent of the impact on ratings would take a cue from the timelines with which this spike plateaus, and then starts receding, he said.

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