The second wave of coronavirus has taken a toll on the livelihoods of many, and the economy is already showing signs of its impact. The spread of COVID-19 has once again led to several restrictions, state-wise lockdowns and closure of factory operations gradually impacting many important sectors of the India's economy.The ratings agencies and brokerage firms have forecast that India's economy will bounce back soon after the second wave reaches its peak. A report by SBI economists suggests that India is likely to reach its peak by mid-May if vaccination efforts are ramped up.Even as efforts are under way to break the chain of infections, the economic damage to some sectors could have a cascading effect on the medium-term growth outlook.Here are five sectors that have been hit the hardest by the second coronavirus wave:
Hospitality The hospitality sector is facing a repeat of 2020 as many states have strengthened localised lockdown rules. The sector, which contributes a large portion of India's annual GDP, has been hit hard by the restrictions and curfews imposed by states. Many of these businesses have been brought to a standstill as they are merely allowed to deliver food that qualifies as an essential service.
Tourism The tourism and travel sector that employs millions of Indians started bouncing back after the first wave, but little did they know that Covid would be back for the second round of devastation.The restrictions due to the second wave have again crippled the tourism sector, which was struggling to recover from the initial losses suffered by businesses in 2020. Many smaller establishments may not be in a position to resume their businesses again after the second wave subsides. This is likely to have a devastating impact on households' incomes as unemployment will rise.
Aviation and travel Aviation and other travel sector establishments faced a massive struggle during the first wave of the pandemic. The situation during the second wave is slowly turning grim as restrictions continue to rise.Reports suggest that air travel has seen a 50 per cent reduction over the past few weeks. The fact that people are scared to step out of their houses indicates that the larger travel sector is also taking a battering. While airlines were slowly starting to increase revenue margins, the deadlier wave of Covid-19 has made the situation turbulent again.
Automobile The carmakers in India are back under pressure as sales have sharply fallen. A report by Emkay Global Financial Services indicates that the automobile sector is expected to remain under pressure in the near term due to the Covid-19 situation in India.The report said that the sector is expected to recover only in the second quarter of the year. However, experts suggest that it will depend on how fast India can bring the second wave under control.
Real estate and construction Real estate and construction sector activity has started facing disruption during the second wave, as a large number of migrant workers have left urban areas. The lack of labourers has hit both housing and construction projects in urban areas; states, where the virus is spreading fast, are likely to face significant delay in the completion of pending projects.