Covid-19, a global pandemic have brought about a stop to the economy of countries across the globe, not just India. It has affected the manufacturing and the services sector, hospitality, tours and travels, healthcare, banks, hotels, real estate, education, health, IT, media and others. The economic stress is growing rapidly. While lockdown and social distancing result in productivity loss on the one hand, they cause a sharp decline in demand for goods and services by the consumers in the market which leads to a collapse in economic activity. But it is true that the lockdown and social distancing are the only cost-effective tools available to prevent the spread of covid-19.
The economic impact of covid-19 is very disturbing. No one has been spared of its ill effects. Factories, Restaurants, Cafes, Markets, Flights, , Malls, Universities and Colleges were shut down. Fear of corona virus has limited the movement of the individuals. People were not even going to buy the daily essentials and these all were somewhere impacting the economy of the world as a whole.
Developing countries like India has a growing economic. This pandemic has brought with many challenges. Economic is one of them.
The COVID -19 virus which initially started in China and later the World Health Organization (WHO) Announced COVID-19 as a global health crisis on 11th March 2020. This global pandemic had a vast impact on the economy of India. On 4 April, former Reserve Bank of India chief Raghuram Rajan said that the coronavirus pandemic in India May just be the “greatest emergency since Independence”.
The Indian economy was in its worst phase even before the coronavirus outbreak. The year 2020 is also considered as the slowest growth in at least eight year. The lockdown phase further has its long-term impact on the Indian economy. According to the ministry of statistics,India’s growth in the fourth quarter of the fiscal year 2020 went down to 3.1%. This drop is mainly due to the covid-19 pandemic effect on Indian economy (chief economic adviser to the government of India).
The World Bank said that the current pandemic has “magnified pre-existing risks to India’s economic outlook”. However, World Bank and rating agencies had recently disclosed
India’s growth for fiscal year 2021 is the lowest figure that has not been seen in three decades since India’s economic liberalization in 1991. According to the CRISIL this will perhaps be
India’s worst recession since independence. State Bank of India Research discloses that the 40% GDP is contraction over the fiscal year 2021. That’s contraction will not be uniform,rather it will differ between various parameters like state, sector etc.
Major companies in India such as Larsen and Toubro, Bharat Forge, UltraTech Cement , Grasim Industries, the fashion and retail wing of Aditya Birla Group, Tata Motors temporarily decided to suspend or significantly reduce their operations in a number of manufacturing facilities and factories across the country during the first 21 days of the lockdown. iPhone producing companies in India also suspended a majority of operations. Nearly all two-wheeler and four-wheeler companies put a stop to production till further notice during the lockdown. Many companies decided to remain closed till at least 31 March such as Cummins which temporarily shut its offices across Maharashtra. Hindustan Unilever,ITC Dabur. India shut manufacturing facilities except for factories producing essentials. Foxconn and Wistron Corp, iPhone producers, suspended production following the 21 days lockdown orders.
After the lockdown, almost 14 crore (140 million) people lost their employment while salaries were cut for many others. The Indian Economy was expected to lose over ₹32,000 crore(US $4.5 billion) every day during the first 21-days of complete lockdown, which was declared following the corona virus outbreak. Under complete lockdown, less than a quarter of India’s $2.8 trillion economic movement was functional. Up to 53% of businesses in the country were projected to be significantly affected. Supply chains were put under stress with the lockdown restrictions in place; initially, there was a lack of clarity in streamlining what an “essential” is and what is not. Those in the informal sectors and daily wage groups have been at the most risk. A large number of farmers around the country who grow perishables also faced uncertainty.
Despite the negative outcomes of the COVID-19 Pandemic, there were also some positive effects such as there was a drop in pollution level, Yamuna and Ganga river saw a significant improvement in the water quality during lockdown, there was also a significant drop in crime rates as cities like Delhi, Bengluru, Kolkata reported a drop of about 60-70% in their crime cases. India also witnesses low car accidents as it was earlier ranked the number one country in road accidents.”
by Akshit Dhar (Marketing Analyst and Blog Writer)