By Express News Service

NEW DELHI:  The finance ministry has brushed aside the fears of next wave of pandemic and said that any subsequent waves will be mild in impact, if the country sustains the momentum of vaccination programme.

“Having antibodies reduces the probability of acquiring serious illnesses, as is borne by studies. So, any subsequent waves are expected to be mild in their impact on hospitalisations and deaths. However, it is imperative that Covid-appropriate behaviour and due protocol is followed,” the monthly economic report released by the financial ministry said.

The report added that the impact of the second wave is muted and the economy has started recovering, as suggested by various economic indicators. The finance ministry said the movement of high frequency indicators in July clearly point towards a broad-based economic revival. PMI Manufacturing sharply rebounded to expansionary zone in July emerging from the previous month’s contraction. GST collection also reclaimed its Rs 1 trillion plus territory in July signifying increased business and consumer activity. Rail freight in July hit a record 18.3% growth.

The surge in economic activity in July was further corroborated by trends in Kharif sowing, fertilizer sales, power consumption, vehicle registrations, highway toll collections, e-way bills and digital transactions. Latest available data on growth of eight core industries, auto sales, tractor sales, port traffic, air passenger traffic also indicate improvement from the contraction induced by the second wave.

“With the second wave abating in most  parts of the country and state governments lifting the restrictions in  phases, there are visible signs of economic rejuvenation since second half of May. This resonates with the expectation that the impact of the second wave will be muted,” the report said, adding the rebound in economic indicators and the muted impact of the second wave is corroborated by upward revision of RBI estimates for real GDP growth in Q1 of 2021-22 to 21.4% from its June estimate of 18.5%.