Happy Freedom day Anniversary !!

Happy anniversary ! Of what , you ask ? Of the day we got back our freedom. This time last year, the city opened up after more than 100 days in possibly the longest COVID related quarantine lockdown. Remember  ?

Well, in case you don't , here is page to refresh your memory. 

It was a hard earned victoria. For all Victorians.

It was good while it lasted

 Yep. We had a good run. And it was good while it lasted. I am talking of the relative COVID-free time that the State of Victoria and the city of Melbourne enjoyed for maybe about 6 months. 

Victoria had come of out a severe and extended lockdown by the end of 2020. Cautiously, and tired, people ventured out, to celebrate a well earned summer break. It was beautiful. The sun was out, people were back. But more important, there was hope. That that would be the last time we Victorians had to endure such a collective trauma. And this was evident in the news: after headlines of people suffering and dying from COVID, the news reverted to people getting bitten by sharks and jellyfish, and another set of possible summer bush fires.

Most places of work started taking down their restrictions. Employees returned, cautiously I should add, to their workplaces all over the country. But it was clear that the next step in this fight was to get the vaccines, in order to provide a lasting protection against the isolated cases still trickling down into Australia. You see, the airports and the borders had reopened, and this meant that Australians stuck abroad could now return, in small numbers.  They had to quarantine for 14 days, and it was in these hotels that the next set of cases began getting out. There was  a breach in South Australia, but the numbers were down in single digits. But there were also talks of new, severe mutant variants of COVID, which spread faster, and with fewer symptoms.

But people trusted the govt, and waited for the vaccine shots. Patiently. And the govt, kept falling off the train. The country does not have any pharma company that could make the vaccine themselves, so they were completely reliant on imports, like they are for most things. And the EU blocked further exports of the vaccines as AstraZeneca was behind committed shipments to EU states. It was becoming clear that the federal govt had no clear set goals to this target.

And so we had no option but to wait. And slowly and steadily, the masks came off, and people came out to enjoy the rest of summer and whole of Autumn. The govt was more concerned that people were reluctant to return to the cities, and less concerned that those who were willing to get vaccinated, were not getting the shots. There were huge plans announced to try and entice city foot traffic back, which included free coffee and restaurant deals !

Too soon. Because winter brought bad news. A new COVID variant has now hit the state, and is spreading rapidly across the city. This new variant was first found in India, and got of hotel quarantine in SA again. But by the time it was found, patient 0 had visited some very populous parts of the city. As of today the count of total cases stands at 60+. And they are still rising. 

Starting last week, the state was pushed into another severe lockdown. And just like that, were all back in our homes. A bitter reminder that the pandemic was still not over on earth. 

While other countries are still fighting the virus with primitive healthcare, we in Australia has so far had a better run. 6 months of relative freedom was not that bad, to be honest. I got to go on a short holiday. We got more sun than we thought we would. There were days we celebrated, and evenings were revelled in. Even had a get together at work. All of that was a welcome relief from a year of being locked in. 

It is not over yet. The wait continues. 

We should not forget this happened

 

India's second Covid wave

 Failure of governance.

Overconfidence.

Celebrating too early.

This is what all this has lead to.

Nation doomed

India has long lived in a state of denial. And now it is clear the country is doomed. 

It takes guts to do the right thing. And none of those in power there has these guts.

Somebody please lock the country down already.

How India lost the vaccine war

Text from the-ken.com/the-nutgraf/how-india-lost-the-vaccine-war/

If you’ve been following the news, two really important events happened last week.

 

The President of the United States, Joe Biden, announced that all adults across the US would be eligible to receive the Covid-19 vaccine in the next two weeks. Earlier, the US had expected this to happen by 1 May. Things are going so well that they’ve decided to move it up by two weeks. 

 

Meanwhile, India is going in the opposite direction. The pace of vaccination, which was steadily picking up, now appears to be slowing down. Multiple states have reported shortages, while the number of coronavirus cases across the nation is accelerating. Adar Poonawalla, CEO of the Serum Institute of India (SII), the largest vaccine manufacturer in the world, has said that existing production capacity is "very stressed, to put it frankly" and that “we are still short of being able to supply to every Indian”. 

Public memory is short, but back then, we weren’t even sure if we’d even get a vaccine. Nobody had created a working vaccine for a coronavirus, and the fastest vaccine ever developed took us over four years. We had to achieve the impossible while the world was in a global lockdown, with supply chains paralysed. 

Even in the early days, any betting person would tell you this—if a vaccine was going to be developed, it would likely be developed by a pharmaceutical company in the US. The logic was obvious. The pharma industry in the US was one of the most advanced in the world. It had the know-how. It had a history of research and development. And it had the capital. 

 

However, if you asked the same betting person to guess where the vaccine was going to be manufactured on a mass scale, the most likely answer you were going to get was… India. 

 

Again, the reasoning was obvious. India is a vaccine manufacturing powerhouse—at that time nearly 60% of the world's vaccines were manufactured by a small group of manufacturers in the country.

 

For the global pandemic to quickly end, the US would have to develop and discover the vaccine, and India would have to manufacture it. 

 

The US was going to be the inventor. India was going to be the factory. 

 

And both of them had to work faster and smarter than they had ever done before to make it happen. 

 

Operation Warp Speed

 

Faced with this reality, in May 2020, the US federal government decided to act boldly and swiftly. It understood that the problem wasn’t whether we’d develop a vaccine but was to identify a vaccine sooner and to manufacture it faster when it was identified. With every additional month, people were dying, lockdowns became more severe, and the economy continued to plummet. This needed to be arrested quickly.

 

So the federal government made a plan. The plan was to support seven different vaccine candidates simultaneously to speed up trials and the approval process and to promote ways to manufacture them at scale.

 

This program was called Operation Warp Speed. And it was conceived as a partnership between the federal government and private companies. 

 

Pay attention to the last bit. It’s important.

 

The US government was smart enough to understand that the only way that a vaccine would emerge faster was if it just gave the pharma companies lots of money to fund their research and got out of the way. Not all companies needed the funding. Companies like Pfizer, which were well-capitalised, didn’t need it. However, others did. And once pharmaceutical companies realised that there was free money on the table and that they didn’t need to put in risk capital of their own, they jumped at the chance.

 

How much money? 

 

Oh, a little over $11 billion. Given out to eight of the biggest pharmaceutical companies in the world. 

 

All tasked with one mission — find a vaccine. 

 

All of them used different methods to get there.  

Here’s a list, from Wikipedia.

And that’s how the American pharmaceutical companies got to work. 

 

In India, on the other hand, something else was happening. 

 

Serum Institute of India

 

India had several vaccine manufacturers, but the biggest one was a company called the Serum Institute of India (SII). 

 

SII is an unusual company for many reasons. First, it’s entirely privately held by a billionaire family. It originally started off as a horse farm and soon graduated to vaccines. By 2020, it was the largest manufacturer of vaccines in the world, churning out nearly 1.5 billion doses every year. SII’s customers are mostly from other countries around the world; it’s an Indian private company with international customers. 

 

And when the pandemic hit, SII saw an opportunity and stepped up. One could argue that they had no other option. Others could argue that it would have been foolish to skip such a business opportunity. 

 

Nevertheless, SII was ready for the challenge. 

 

SII may be a private, family-run company, but it was still a company. Companies have a certain amount of risk appetite. And SII had a choice ahead of it—do they manufacture the vaccine or not? And by when? 

 

From SII’s standpoint, the sensible thing to do would have been to wait until it found out which vaccine would work and then scale up the production of that vaccine. 

 

Instead, SII decided to take a calculated bet. 

Last May, Poonawalla met the AstraZeneca chief executive, Pascal Soriot, on a video call, and negotiated a deal for SII to manufacture about 1bn doses over 12 months – almost half the overall total.

The same month a package arrived at SII’s vast campus in Pune, 150km south-east of Mumbai. Packed in dry ice was a vial containing the components needed to create the Oxford vaccine, cell substrate in which to grow it and detailed instructions. Not included were the results of any clinical trials or regulatory approvals that the vaccine was effective or even safe.

Nevertheless, Poonawalla ordered three of his factories – which were at the time making “some very lucrative [other] vaccines” – to immediately switch production to the Oxford/AstraZeneca coronavirus vaccine AZD1222.

“We produce 1.5bn vaccine doses each year. We never imagined the whole world being so dependent on us, but nobody else has our capacity to scale up,” he said. The decision to invest, he added, was easy because the firm is a private business “and not accountable to investors and bankers and shareholders”.

Instead, he says, “it was just a quick five-minute chat between myself and my father.” It was also, he admits, “a huge gamble – huge, huge, huge. People said I was crazy or stupid doing such a big bet at that time.

Now SII is a company in pursuit of profits, so this wasn’t exactly an altruistic move. Business decisions aren’t supposed to be altruistic. Despite this, it’s hard to deny that it was a risky business decision. 

 

But there was one problem. It was the same problem as in the United States.

 

Money. 

 

There was no Operation Warp Speed in India. In fact, for a long time, news about whether SII would receive funding to scale up and manufacture the vaccine was quite murky. In one interview back in April 2020, Poonawalla said that “(the government) are very happy to share some risk and fund something with us, but we haven’t really pencilled anything down yet”. Around the time, the Department of Biotechnology had helped fund a Phase-III clinical trial for the vaccine developed by SII. 

 

So in August, SII, for the first time in its history, went for external funding. It spoke to private equity investors, raised $150 million from the Bill and Melinda Gates Foundation and even invested $100 million of its own money. 

 

There are no news reports to be found about any funding for SII from the Indian government. 

 

Incentives 

 

It’s one thing to offer funding for research and development, but in July 2020, the US government went one step further. 

 

It placed an order with Pfizer for 100 million doses of the vaccine. It paid nearly $2 billion to Pfizer for this. And it did this even before it knew whether the vaccine was going to be a success or not. At that time, several critics pointed out that this was a small number, but the US government had another clause in the deal—it gave itself an option to purchase an additional 500 million doses from Pfizer.

 

It didn’t stop there. 

 

It went and signed another $1.5 billion contract with Moderna for another 100 million doses. 

 

It didn’t stop there. 

 

It also signed contracts with Johnson & Johnson, Novavax, and AstraZeneca for more than 500 million vaccine doses. 

 

The US was basically wearing two hats. In one hat, it acted as the State, pumping in taxpayer money to fund research of the vaccine because it was in public interest. In another hat, it was the vaccine companies’ first customer. It pumped in money to boost their cash flow and to be first in line to reap the rewards should the vaccine succeed. It was the ultimate illustration of skin in the game. 

 

Other countries followed suit. The UK decided to purchase 40 million doses of the Pfizer vaccine. In November, the European Union reached an agreement with Pfizer to buy up to 300 million doses. Canada decided to purchase up to 76 million.

 

The vaccine companies wanted capital. And they had gotten it. 

 

The only question was whether they’d be able to manufacture it at the scale that was needed. 

 

So the US government decided to create incentives not just for development but also for manufacturing. 

 

The missing purchase order 

 

Meanwhile, in India, SII was manufacturing the vaccine at full speed. Since it went ahead even before the vaccine was fully tested, SII had accumulated a stockpile of several million vaccines in its warehouses by the end of 2020. 

 

The company had stepped up, but there were a couple of problems. 

 

Problem 1 : Who gets the vaccines?

 

The deal that SII had struck with the Indian government was that India would purchase the first 100 million vaccines at a price of Rs. 200 ($2.66) each. This was one of the lowest prices in the world. And the only reason that SII signed on with the Indian government at this low rate was based on the understanding that it could sell subsequent doses on the private market at a higher price. 

 

However, SII was not unduly worried because it had already received purchase orders from several countries—including Saudi Arabia, Brazil and Morocco—for millions of doses. All of this would help fund SII and enable it to scale up. Morocco had signed a supply contract for 20 million doses back in August 2020.

 

But there was a problem: the Indian government hadn’t signed any purchase orders with SII. 

 

In January 2021, India’s largest vaccine manufacturer had no idea how many vaccines the Indian government would need and by when. 

The vaccines were ready. 

 

50 million of them. 

 

But the Indian government wasn’t. 

 

Problem 2 : More vaccines were needed

 

SII was manufacturing close to 60 million doses a month. It needed this number to be much higher to have any hope of meeting India’s requirement. Then the company had a fire in its factory, which Poonawalla later said cut short its plans to expand production. 

 

India had an entire year to scale up manufacturing capabilities across the nation, all to produce the vaccine at a war footing when it was ready. 

 

But it didn’t.

 

Then on 11th January 2021, the Indian government finally placed an order with SII. It was its first purchase order.

 

It ordered 11 million doses.

 

Two weeks later, the United States federal government exercised its second option with Pfizer and Moderna. 

 

It ordered 300 million doses, bringing the total order to 600 million doses. 

Meanwhile, in India, as the coronavirus cases rose, India quickly suspended exports on all vaccines. 

 

Countries that had booked vaccines with SII much earlier than everyone else were told to wait. India’s needs had to come first.

 

One of them was Brazil, where 3,000 people die from the coronavirus every day. 

 

Two days back, SII received a legal notice from AstraZeneca, the developer of the vaccine, over delays. 

 

Earlier this week, SII asked for financial help from the Indian government to the tune of Rs 3,000 crore (~$400 million). 

 

As of this morning, there has been no official response from the government to SII’s request.

There’s no real moral to this story, but it does reveal some interesting perspectives about the two nations. 

 

The story of India and the US’ contrasting methods of developing the vaccine is one of the oldest in political theory—it’s about the relationship between the state, capital, and the free market. All these entities are quite complex and often exist with a great deal of tension between them. Even more complicated is the fact these entities also operate together—and often have orthogonal goals. 

 

The US federal government understood the rules of the game and played by it. It understood that private players operate in a free market and acted as a buyer while also providing capital. 

 

If you look at the US, it appears as though everyone won—the pharma companies, the government and even the American citizens — every single person received the vaccine for free.

 

India, on the other hand, did everything else. It treated private companies like the SII with a mixture of disdain and ownership, and by the end, it’s clear that nobody is a winner. 

 

Not the Indian government.

 

Not SII. 

 

And certainly not India’s citizens. 

 

It’s going to be a rough few months ahead. 

 

Stay safe and take care.

Here's hoping for a totally normal year.

Finally , its almost over ! And entire year of pain, suffering and staying indoors. Centuries from now, historians are going to compare every doomsday year with the year 2020; a year which was supposed to be of hope , fun and all things good, but ended up killing more people than any natural calamity. This is a bar set too high.

For those of us who survived this year, it is easy to forget who scared we ourselves were at various points in time. The first few cases reported where all in Wuhan, China. It began with the hush-hush announcement of the pandemic, followed by the over confident response of world governments that we can easily survive this, and took a while for the reality to set in. That despite our world-class health systems and preparedness, we had no idea how to contain COVID-19. 

And that is when the fear set in;  when it was reported that there are now cases in our neighborhood, in the adjacent street, or in our office space. It was as if the whole world had gone to war, first with an invisible enemy, but then with each other. It was one thing to watch from safety as a distant country tore itself, totally another thing when the killer is next door.

As I write this, more than 1.7 million people have died world over due to the Corona virus. No amount of consolation can help the survivors of these deaths.

The virus is still out there, but 2021 now brings hope of its end. More than one vaccine has been shortlisted, and the world will eagerly wait for these life-saving drugs. We saw how at various points, ignorance and petty religious views infected more people. But science has won, as science has always won through the centuries.

For once, lets hope nothing great or worse happens this year. Lets hope for a totally normal year, a boring year where we can all go back to living our lives outdoors.

To clear your mind, here is a picture of a totally normal day somewhere in Switzerland.

Wish you a truly Happy New Year !

Happy Freedom Day !

 Happy Freedom Day, Melbourne ! Good to see everyone back. Lets not rush into things, we have got a long and glorious summer ahead of us.

A scientific opening up of the state

This just in. After more than 3 months under probably the world's harshest COVID-19 induced lockdowns, the metro area of Melbourne, and the state of Victoria is cautiously &  slowly opening up to a summer of hope. 

From midnight tonight, the city's imposed restriction of travel within 5 kms of resident's home, is being relaxed to a generous 25 kms ! And the max time limit of 2 hours is also gone for good. Families in the city can now be outdoors for however long they wish to be, as long as they don't mingle too much with other families. Outside of the family bubble, social distancing still applies, people have to wear masks and stay 1.5 m apart. But that is a small price to pay to the relative freedom this move brings to the millions locked down in the city. 

And if you can't already tell from my ear-to-ear smile, I am one of those millions who will now be able to enjoy a bit more of the elusive sun.

But nothing is set in stone, as the premier has repeatedly warned. If the case numbers grow , the restrictions will return. So we could still, technically, lose it all, if we decided to ignore the rules at the risk of public health.

But keeping that aside, Victoria's scientific and often extremely strict approach to containing this virus stands in stark contrast to how other states, and countries have bungled their own approach. After losing the plot by a ill-handled hotel quarantine system, the state had to hibernate for many months to earn their right to taste freedom again. And yes, many hundreds died during that time, and thousands of businesses went bust, but the state chose the lesser of two evils at every point. In the absence of a vaccine or anti-dote, the govt decided to save lives, instead of opening up for the sake of its destroyed economy. And this is where other countries, like the US, UK and India have got their priorities wrong.

Kudos to the city, state, and to the millions of Victorians who saw us all through. Yes this winter was longer and harsher than usual, but we can now look forward to warmer days in the sun. 

While the rest of the world decides to learn from us.

Well done, Melbourne !

Take a look at the COVID case graph of Victoria. It just keeps going down , down and down !

 

Now that, is impressive. Most of the cases in Victoria were concentrated in the capital city of Melbourne. But we knew all Victorians could see us through. It was tough, the past 6 weeks, made worse by us becoming the laughing stock of the nation. But all that matters is the result. And this is impressive indeed.

Here’s hoping we continue to keep the trend , and come out clean on the other side.

A stitch in time.

Victoria is right now in its 4^th week of its stage 4 restrictions, which was enforced starting August 2^nd. This is more of a curfew than a simple restriction and is far stricter and fine grained than the earlier restrictions. And it seems to be working. Take a look at the graph of new cases being reported in the state of Victoria.

The 2^nd of August is right in the middle of this graph, when the number of cases being reported was at its peak. And then the counts go down gradually, as soon as the curfew hits the city, and later the state completely. It is a familiar pattern, the number of infections decrease as soon as the primary vector, humans ,are immobilised. Everyone is staying locked in , until 13^th September, the date these restrictions are scheduled to end.

Simply put, a stitch in time saves nine.

It is not , and was never, that easy to ask Victorians to stay in. Aussies are an outdoorsy folk, the live outside, under the sun and in the rain. They could maybe stay in a few weeks, but definitely not in months. All through this period, there have been conspiracy theorists and plain idiots calling for a boycott of the curfews, asserting falsely, that it violates their ‘freedom of movement’, whatever that means. There were also calls from small business owners to re-open in a controlled way, in order to bring back much needed business. Add to this the bunch the virus deniers and anti-vaxxers, you have a gathering of monsters to control. Having never experience a war first hand, and not used to being ruled under a regime, people here take their own personal freedom for granted, and not  a privilege. The only thing the country had going for it was the small population. At 25 million people, there are more people in the state of Kerala in India than the total population of Australia and New Zealand combined ! So some police presence on the road, and the new of Australian Defence Forces patrolling the streets was enough to herd in the dissenters. And of course, the heavy fines 😊.

So verdict ? It seems to be working. One can only hope the course will hold steady until the counts come down to 0. And hopefully, this will the last time this lesson need to be learnt. This is our second time doing this, remember ?

Can’t go back. There can not be a third wave.

Its worse the second time.

The last few weeks have been really weird living in Melbourne . The city is usually crowded with people walking in long winter jackets. It sometimes rains suddenly without warning , and people run to the nearest shelter. The days are very short , and people lap up multiple cups of coffee and run in the parks. Pubss, restaurants, hotels are always full, no matter what time of the day it is .

But you would be hard pressed to realise that this is the same city we're living in right now. There is nobody outside, absolutely nobody. Melbourne is now in a stage four locked on restriction. State of Victoria is in stage three locked on restriction. until a few years ago, Melbourne was known as the best city to live in the whole world. The irony of it. Despite being a properly planned city , with excellent infrastructure and better than average governance, the city has gone to the dogs. If you people, mind you are very few small number of people, never thought of staying in during the restrictions imposed in the first wave lockdown. And now the larger city and the entire state is paying its price for it .

It's always tougher the second time around. During the first wave lockdowns, the people were largely confident that we will be able to easily beat the coronavirus . After all we are the Australia ,the country which survived the last recession. Even when the lockdowns were announced, there was sheer optimism on the walls and on the internet . Those storeys of optimism going around , people were donating money to the poor, the needy, the sick . people for donating things like toilet paper dried foods to those in need. Many were keeping teddy bears on the windowsills so children could count them . But the second time around stop that optimism is gone for the better. the number of positive cases is now more than three times the big count from the first wave . More people have died . There is nothing to be optimistic about.

Countries like Australia have a problem, they have never seen Days of restriction. The citizens often strike and shut down the streets, but they have never seen a day when the government shuts down the streets and forced people to stay home. such things are only heard of from developing nations like India, or a failed state like the current USA. People here have always been free, as a country and as individuals. So when a law is passed requiring them to give up those freedoms, they don't know how to react. For the average Australian, giving up a full few days of freedom is OK, but anything more than a week and the people will start to revolt. They don't understand staying in . These are people who spend more time outdoors than inside their homes anyway.

But there's always a first time , specially days like this pandemic. There's a lot riding on this latest stage for restriction. It's not only the entire country, but the entire world watching us right now. It is essential for everybody in the country to follow the government imposed restrictions this next couple of weeks in order to ensure we come out clean on the other side. As I've said before, we are at war . We are fighting an invisible enemy. But the good thing is we don't have to go out and fight listen to me.

All we have to do is shut up and stay home.

Everyone expects India's economy to contract. Everyone.

S&P Global Ratings on Thursday said the Indian economy will shrink by 5 per cent in the current fiscal as it joined a chorus of international agencies that are forecasting a contraction in growth rate due to coronavirus lockdown halting economic activity.

Stating that COVID-19 has not yet been contained in India, the rating agency in a statement said the government stimulus package is low relative to countries with similar economic impacts from the pandemic.

"The COVID-19 outbreak in India and two months of lockdown -- longer in some areas -- have led to a sudden stop in the economy. That means growth will contract sharply this fiscal year (April 2020 to March 2021)," it said. "Economic activity will face ongoing disruption over the next year as the country transitions to a post-COVID-19 world."

Forecasting a 5 per cent contraction in 2020-21 (versus 1.8 per cent growth forecast it made in April), S&P said growth is expected to pick up to 8.5 per cent in the following fiscal (up from the previous forecast of 7.5 per cent). The GDP is projected to expand by 6.5 per cent in FY23 and 6.6 per cent FY24.

Earlier this week, Fitch Ratings and Crisil, too, projected a 5 per cent contraction for the Indian economy.

While Fitch Ratings had stated that India has had a very stringent lockdown policy that has lasted a lot longer than initially expected and incoming economic activity data have been spectacularly weak, Crisil had said the country's fourth recession since Independence, first since liberalisation, and perhaps the worst to date, is here.

On Thursday, Fitch Solutions (which is separate from Fitch Ratings) forecast real GDP to contract by 4.5 per cent in FY2020-21 saying "high unemployment will depress consumer spending, while widespread economic uncertainties will curb investment in the private sector.

Moody's Investors Service on May 8, forecast a 'zero' growth rate for India in FY21.

In the past 69 years, India has seen a recession only thrice – as per available data – in fiscal year 1958, 1966 and 1980. A monsoon shock that hit agriculture, then a sizeable part of the economy, was the reason on all three occasions.

This time around agriculture is not the reason but a dent to industrial and economic activity caused by lockdown, which was first imposed on March 25. The lockdown has been extended thrice till May 31 with some easing of restrictions.

S&P Global Ratings expects varying degrees of containment measures and economic resumption across India during this transition.

"COVID-19 has not yet been contained in India. New cases have been averaging more than 6,000 a day over the past week as authorities begin easing stringent lockdown restrictions gradually to prevent economic costs from blowing out further. We currently assume that the outbreak peaks by the third quarter," it said.

India has grouped geographical zones into red, orange, or green categories based on the number of cases. Areas currently classified as red zones are also economically significant, and the authorities could extend mobility restrictions.

"We believe economic activity in these places will take longer to normalize. This will have knock-on impacts on countrywide supply chains, which will slow the overall recovery," it said.

The rating agency said high-frequency data for April showed major economic costs for India - purchasing managers index (PMI) for the services sector was 5.4, on a scale where anything below 50 indicates a contraction of business activity from the previous month for the sector.

Also, service sectors, which account for high shares of employment, have been severely affected, thus leading to large-scale job losses across the country. Workers have been geographically displaced as migrant workers travelled back home before the lockdown, and this will take time to unwind as lockdown measures are lifted.

"We expect that employment will remain depressed over the transition period," it said.

S&P said India has limited room to maneuver on policy support. The Reserve Bank of India has cut policy rates by 115 basis points but banks have been unwilling to extend credit. Small and mid-size enterprises continue to face restricted access to credit markets despite some policy measures aimed at easing financing for the sector.

"The government's stimulus package, with a headline amount of 10 per cent of GDP, has about 1.2 per cent of direct stimulus measures, which is low relative to countries with similar economic impacts from the pandemic. The remaining 8.8 per cent of the package includes liquidity support measures and credit guarantees that will not directly support growth," it said.

The rating agency said the big hit to growth will mean a large, permanent economic loss and a deterioration in balance sheets throughout the economy.

"The risks around the path of recovery will depend on three key factors. First, the speed with which the COVID-19 outbreak comes under control. Faster flattening of the curve -- in other words, reducing the number of new cases -- will potentially allow faster normalization of activity. Second, a labour market recovery will be key to getting the economy running again. Finally, the ability of all sectors of the economy to restore their balance sheets following the adverse shock will be important. The longer the duration of the shock, the longer recovery," it added.

Acknowledging a high degree of uncertainty about the rate of spread and peak of the coronavirus outbreak, it said some government authorities estimate the pandemic will peak around mid-year, and that has been used as an assumption in assessing the economic and credit implications.