However, the negative outlook reflects lingering uncertainty around the debt trajectory following the sharp deterioration in public finance metrics due to the pandemic shock from a previous position of limited fiscal headroom.
Fitch said wider fiscal deficits and government plans for only a gradual narrowing of the deficit put greater onus on India's ability to return to high levels of GDP growth over the medium term to stabilize and bring down the debt ratio.
Fitch has forecast a 12.8 percent recovery in GDP in the fiscal year ending March 2022 (FY22), moderating to 5.8 percent in FY23 from an estimated contraction of 7.5 percent in FY21. Fiscal metrics have deteriorated sharply in the context of the macroeconomic shock and efforts to support health outcomes and economic recovery.
The central government’s FY22 budget outlined a gradual medium-term consolidation, targeting a deficit of 4.5 percent of GDP by FY26.
This compares to a previous medium-term target of 3 percent of GDP under the Fiscal Responsibility and Budget Management Act. The medium-term debt trajectory is core to our rating assessment, as higher debt levels constrain the government’s ability to respond to future shocks and could lead to a crowding out of financing for the private sector, in our view. India’s current ability to finance its deficits domestically is a strength relative to most ‘BBB’ peers.
It can be said that the degree of asset quality deterioration from the pandemic shock is unclear, amid regulatory forbearance measures and renewed pressures from the second wave.
2. Oxygen supply to industries banned to meet patients’ demand; Covaxin production to increase 10 times
The total number of Covid cases in India continued to rise with Maharashtra and New Delhi reporting the highest number of infections regularly.
Amid spiraling coronavirus cases in the country, the demand for medical oxygen in the country has gone through the roof. While the Railways has decided to run ‘Oxygen Express’ trains over the next few days to transport liquid medical oxygen and oxygen cylinders across the country, the Home Ministry has banned the supply of oxygen for industrial purposes except in nine specified industries. Empty tankers will start their journey from Kalamboli and Boisar railway stations in and near Mumbai on Monday to load liquid medical oxygen at Vizag, Jamshedpur, Rourkela, and Bokaro.
What other steps is the government taking to curb the rate of infections?
India took only 92 days to reach the mark of 12-crore vaccinations, the fastest country to do so, as per the Union Health Ministry. The government claims that COVID-19 vaccine supplies to small states are replenished every seven days and every four days for big states. Steps are taken to quickly enhance the basket of vaccines available. Production of Covaxin will increase to 10 times by September 2021. The government has planned to double the remdesivir production to around 3 lakh vials per day over the next 15 days, to make it readily available readily for COVID-19 treatment.
“Production being doubled to 74.1L per month by May; Express permission given to 20 manufacturing plants to increase production; Exports prohibited; Prices capped; Strict monitoring to curb any malpractice, hoarding and black marketing.”, as per Union Health Minister Harsh Vardhan.
He also said the number of beds for COVID-19 patients will be enhanced by setting up temporary hospitals and dedicating wards at hospitals under Union ministries.
3. What was behind the collapse of the European Super League?
Who would have thought that a multibillion-dollar cash grab forged in secrecy between the 12 wealthiest clubs in European football would go down so badly in the middle of a worldwide crisis and record economic inequality?
Just two days after the elites of European club football decided to join a breakaway Super League, to hoard the revenue they think they truly deserve, the grand scheme fell apart after mounting outrage from the football fraternity. A refreshing landmark moment as it was for the game, the scrapping of the plan should not hide the grim reality that the present Champions League structure is not entirely flawless.
Needless to say, all of the remaining 14 Premier League clubs that weren't invited to join the European Super League were less than impressed by the so-called ‘Big 6' deciding to break away without consulting them or considering the effects on the entire football pyramid that has been built up over the last 100-years.
UK Prime Minister Boris Johnson, under fire for his handling of the pandemic and weeks away from local elections, took the opportunity to speak out against the proposal, threatening to reform competition law to stop a cartel of businesses from disrupting the world’s favourite sport, and one of the UK’s greatest exports.
The club owners had gambled big and lost. As of the 21st of April, eight of the 12 teams that were confirmed to be breaking away to create the European Super League have since withdrawn from the get rich quick scheme.
What kind of money are we talking about?
Liverpool, the 2018-19 winners, earned around 90 million euros, including prize money from the Champions League. But if they were to play in the Super League, they would have earned 15 million euros without even factoring in the prize money. Besides, where they finished in the league would have no bearing on their appearance in the ESL.
To get the ball rolling, JPMorgan had agreed a pot 3.5 billion euros ($4.2 billion) to be shared among the first dozen teams to sign up plus another three clubs that had been expected to join them. The clubs were to also receive a "welcome bonus" worth up to €300 million ($360 million) each. Football fans on Twitter criticized JPMorgan over its involvement and said businesses must earn the trust of their customers and communities by acting ethically and morally. Despite this, shares in Manchester United surged 6.7% in New York on, while Juventus' stock skyrocketed nearly 18% in Milan.
Is the ESL dream over?
It was not an overnight design. As early as 1998 European powerhouses had planned such an enterprise. So, it would not be shunned overnight either. Agnelli has vowed to “reshape the project” and remains “convinced of the beauty of that project.”
Fans have protested about the rich clubs getting richer and the betrayal of tradition, but the combination of the attractiveness of the Premier League product, ironically created by a split orchestrated by the FA, and the trend of club owners to exploit their assets suggests a willingness to actively pursue change. The decision for the national governing bodies across Europe and the UEFA itself is whether to embrace and incorporate change and inevitably cede some control or stand firm and fight off the threat and with it consign professional football into a maelstrom of uncertainty.
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