NEW DELHI: The impact of the second wave of the coronavirus pandemic on the economy is likely to remain muted as compared to the first wave, the finance ministry said in its monthly economic report. Admitting that the second wave of the pandemic has posed a downside risk to economic activity in the first quarter of FY2021-22, the report said “there are reasons to expect a muted economic impact as compared to the first wave. Learning to ‘operate with COVID-19’, as borne by international experience, provides a silver lining of economic resilience amidst the second wave”.

The fiscal position of the central government, it said, has witnessed an improvement in the recent months with a revival in the economic activities during the second half of FY2020-21. As per provisional figures, net direct tax collections for 2020-21 are 4.5 per cent higher than Revised Estimates (RE) and 5 per cent higher than collections in 2019-20 — the significant growth compared to 2019-20 provides an indication of economic recovery since the first wave.