NEW DELHI: The Finance Ministry in a report has said that second wave of the Covid-19 poses downside risk to economic activities during April-June, although the impact is expected to be muted compared to that in the first wave.

The Ministry’s official note reads: "The second wave of COVID-19 has posed a downside risk to economic activity in the first quarter of FY 2021-22. However, there are reasons to expect a muted economic impact as compared to the first wave. Learning to "operate with COVID-19", as borne by international experience, provides a silver lining of economic resilience amidst the second wave."

The 'Monthly Economic Review' for April 2021 published by the Department of Economic Affairs (DEA) said that learning to "operate with COVID-19" provides a silver lining of economic resilience amidst the second wave.

Noting that the global economy recovered further in March and April, powered with vaccination drives and fiscal stimuli by few large economies, it said that in India the momentum in economic recovery since the first wave moderated in April due to the second wave of coronavirus.

The ministry added that agriculture continues to be the silver lining with record food grain production estimated in the ensuing crop year on the back of predicted normal monsoons. Rural demand indicators like tractor sales recorded a growth of 172 percent and 36 percent compared to a low base in March 2020 and even the pre-Covid month of March 2019 respectively.

Industrial production showed mixed trends. While the Index of Industrial Production (IIP) in February 2021 registered a broad-based decline of 3.6 percent (YoY) and 3.9 percent compared to January 2021, the eight-core index posted a growth of 6.8 percent (YoY) in March 2021 and 11.1 percent compared to February 2021.

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