An overview of the COVID-19 cases in states shows that Delhi ranks high on number of cases per million, followed by Maharashtra and Telangana, according to DBS Group Research.
The research note by the Singapore based bank points out that these states are likely to be amongst the last few to ease lockdown conditions.
The infection curve in Delhi is still to flatten as the number of cases continues to rise. The government has earmarked zones as containment (red) and high-risk (orange) areas.
The report states that of the top five states, confirmed cases per million (log scale) reaffirms that the situation in Delhi has outrun the rest, with more states joining the fray in recent days.
The report authored by Radhika Rao, Economist, DBS Group says that the government has extended the lockdown to early May, with few parts to resume operations gradually.
State-wise data show that the infection curve is yet to flatten, pointing to the need for further social-distancing measures. India's healthcare resources lag peers, which is a risk if the coronavirus situation escalates.
According to the report incoming data reinforce slowdown risks. Railway freight, sentiment surveys, price data, mobility etc. points to discretionary demand and businesses running below trend.
India's expenditure on health (per capita basis) lags few of its regional peers and the availability of healthcare resources lags, hindering the ability to defend against any sudden escalation in the health crisis.
However, the report notes that the COVID-19 fatality rates are higher amongst the older section of the population, with India's vulnerability low on that count, compared to Italy/ West for instance.
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A consumer survey conducted in early-April by McKinsey signals pessimism over economic conditions versus the previous survey. The Google mobility data shows a sizable drop in late March and early-April when the country has been under a lockdown, the report added.
On the economic impact, manufacturing and services PMIs came under pressure in March, as businesses felt the heat from falling activity in China and early stirrings of weak economic conditions.
Rail freight earnings have dropped significantly, covering minerals, metals, oil etc. The only segment which has improved is food grains and cereals, likely as there are considered essential services.
Also, the private sector unemployment data (weekly for April) shows a spike in the rate. This provides an early peek into potential hurt to job prospects and by extension income/demand trend.
Incoming data for March points to a strong slump in demand, in urban and rural areas. Auto sales declined last year as well, with faint signs of rebound upended by Covid 19 in late Q120.
On the foreign portfolio outflows, the report says they hastened since February as flows head back from EM countries, including India back to the DM countries. India witnessed $15 billion outflows in 1Q20.