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India has currently been able to vaccinate 55.8 million individuals with both doses and 267.5 million individuals with the first dose as per data on the CoWin dashboard. Furthermore, the number of daily doses administered reached an all-time high of 9 million on 21 June 2021 and has steadied around 6 million shots per day since then.

Rise in Credit Amongst Vaccination Surge

As can be seen from the above graph, despite the second wave of the COVID pandemic, credit levels have increased in FY 21 across all sectors, the highest increase being in the retail segment followed by the agriculture sector. Increasing levels of vaccinations have also contributed to credit growth in FY 21. 

Going forward, the declining number of COVID cases and continued surge in vaccinations is expected to fuel credit growth in the next few quarters provided that vaccination momentum continues and India reaches its mass vaccination limit to obtain herd immunity.

Furthermore, the demand which has been built up over time due to the pandemic-induced lockdowns is also likely to aid credit growth since it could induce spending on goods and services as unlockdowns are slowly implemented across states. However, such a scenario is also dependent on whether India witnesses the third wave, the impact it has, and continued support from the government and central bank.