Coronavirus | India's richest state is getting hit hard

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Coronavirus | India's richest state is getting hit hard

India's Covid-19 cases are hurting again and the country's richest state is encroaching on every day. Mumbai- home to India's financial capital- Maharashtra- reported more than 248,000 new cases in only seven days, CNBC's calculation of government data showed. The country's second most populous state accounted for 57% of all cases reported in India over the same period. Since mid-February, infection cases have been lower but the fatality rate remains relatively rising. According to the health ministry's daily update on Thursday, there are more than 580,000 positive cases in India, or about 4.78% of total active cases. Five states- Maharashtra, Karnataka, Kerala, Chhattisgarh and Punjab- account for 78.9% of all active cases in Maharashtra, with the majority of them in the western state of Maharashtra.

Last Sunday, the state of Maharashtra banned night curfew and imposed all gatherings, including political and religious ones. It has also imposed a mask-mandate while authorities are debating further restrictions to stop the spread of the virus, nationwide media reports said that a total lockdown of the state- similar to last year's local lockdown- may not be in the cards. Anand Mahindra, the billionaire businessman who was chairman of Mumbai-based Mahindra Group, announced this week on Twitter that a lockdown would hurt the small businesses of poor, migrant workers. Instead, he urged Maharashtra's chief minister to focus on building up hospitals and health-care infrastructure and to avoid Covid deaths. The economic impact from India's second wave of coronavirus infection appears to be localized for now, Citi economists said in a report this week.

Both the geographical nature of Covid spread and lower appetite among policy makers would keep lockdowns in 2021 more localized and less stringent, said economists Samiran Chakraborty and Baqar M Zaidi. They pointed out that more than half of the active Covid cases are concentrated in 10 cities, eight of them being Maharashtra. According to Chakraborty and Zaidi, these 10 cities are responsible for only around 10% to 12% of India's GDP. So localized lockdowns in these cities are unlikely to lead to a large-scale disruption of economic activity in the country, they said, adding that they still remain concerned about contact-based service industries that are likely to suffer more due to the second Covid wave.

The nationwide lockdown last year put India into a technical recession and disproportionately affected small business owners and workers in the informal sector. In the first wave, the infection rate peaked around September. Singapore is also preparing for upcoming state elections and regional festivities which tend to draw large crowds gathering in places, pointed out Radhika Rao, Indian economist at DBS Group of India. She said heightened preventive measures are needed to slow the spread of the virus. She said in a recent note that the ongoing vaccination campaign can act as a speed breaker to slow the outbreaks. In January, India launched one of the world's largest mass vaccination campaigns, with an initial aim of vaccinating around 300 million people including frontline workers, older residents and those with underlying health conditions.

From Thursday, India will allow people who are under 45 years of age to get Covid shots regardless of their health conditions. Last week, health minister Harsh Vardhan said there are plans to widen the age range to include more people. In India, health ministry data showed Thursday more than 65 million vaccine doses administered as of 7 a.m. local time. At the current rate, it could take the New Delhi-based South Asian nation 2.4 years to vaccinate 75% of its population, according to a recent report from the Observer Research Foundation. That is usually the minimum percentage of the population that needs to be inoculated in order to gain herd immunity, where disease can no longer spread widely within the community.

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