The nationwide disruption caused by the Covid-19 pandemic could lead to India posting a negative GDP growth for the current fiscal, a UBS report has said.

“We now expect India’s real GDP to contract to -0.4 per cent in 2020-21 (previously +2.5 per cent) compared with 4.1 per cent year-on-year (previously 4.5 per cent) estimated in 2019-20. In our base case, we expect current mobility restrictions to remain in place until mid-May and then get lifted, and activity is largely back to normal by end-June,” the global research house observed in the report.

It, however, warned that in alternative risk scenarios, if virus containment fails and the disruptions could last longer, the economic weaknesses during the short term could intensify and the major secondary impacts in the form of job losses, reduced income levels, corporate defaults, rising bad loans and rating downgrade, among others, could delay a potential recovery.

Wage worry

As many as 27 out of the top 100 companies listed on the NSE will not be able to sustain the current wage bill if their revenue dips by 30 per cent or more, a Deloitte study said.

Given the slowdown in general consumption, companies must evaluate their ability to pay salaries, said Deloitte, which conducted a study of the top 100 companies in terms of market capitalisation.