As the second wave of Covid-19 and the resultant restrictions again cripple economic activities, the State Bank of India (SBI) has revised India’s growth outlook downwards for the current financial year.

The latest SBI Ecowrap report has projected a 7.9 per cent growth for the GDP, down from its previous projection of 10.4 per cent. It, however, hoped that the success of the vaccination drive may reverse the downward trend. “We impart an upward bias to this number with the fervent hope of 1 crore vaccinations per day beginning mid-July as per government projections,” the report said.

It also noted that there is likely to be a “disproportionately larger” impact on the economy this time and given that rural is not as resilient as urban, a rebound in pent-up demand is unlikely to make a huge difference in the GDP estimates for 2021-22, and hence it could only be a modest pick-up.

On Monday, India reported a 7.3 per cent contraction in its economy for the year 2020-21.

The SBI Ecowrap noted that the real GDP for FY21 in the provisional estimates has been revised upwards to Rs 135.13 lakh crore from Rs 134.09 lakh crore as per the second advance estimates. Thus, for FY21, the real GDP growth was registered at minus-7.3 per cent as against the earlier SBI estimate of minus-8 per cent.

“The positive growth rate in the fourth quarter of 2020-21, which was projected to be negative in the second advance estimates, has helped arrest the decline in GDP,” it said.