In a survey conducted by accountancy firm PwC India, 79 percent of respondents said that their income levels have been impacted due to COVID-19. However, a majority of respondents (52 percent) are hopeful of economic recovery within the next 12 months.
The report titled 'Full Potential Revival & Growth - Charting India's medium-term journey' said that early discovery of COVID-19 vaccine will be a source of confidence but its delivery to over a billion people might take time.
It also noted that the health situation continues to be dynamic with the continuing spread of the virus. "This has created a direct shock to the economy resulting in a recession."
On the economic front, it said the exogenous supply and demand shock due to the COVID-19 pandemic is likely to cause a recession for the first time since 1979.
The report is based on interviews with business, public sector and citizen leaders, sectoral analysis, and a countrywide survey, wherein PwC India said that nine key sectors that make up 75 percent of pre-pandemic GDP (gross domestic product) and MSME segment were analysed.
Government spending on infrastructure, including health, is expected to help pump-prime the economy beyond the stimulus.
"We estimate that government spending will rise from the current 11.8 percent GDP to 5-7 percent extra, tapering back in FY23 and beyond," it pointed out.