EFFECTS OF COVID-19 IN INDIAN ECONOMY

The effect of corona virus in Indian economy is troublemaking for the country. The international financial organizations like World Bank and Credit Rating Agencies have been downgraded growth of India in the financial year 2021. This is the lowest statistics of India ever seen in three decades since India’s economic liberalization in the 1990s. But India’s projection for 1.9% of GDP to International Monetary Fund is the highest as comparing to Group of twenty nations.

Note:- members of Group of twenty nations are 19 individual countries and European Union.

During the first 21 days lockdown period, India is probably to lose over ₹32,000 crore everyday. Throughout the complete lockdown period less than a quarter of India’s $2.8 trillion economy will be effective. In India 53% of businesses will get affected due to corona virus outbreak. Supply of goods is also a irritating point which annoying to the Government due to restrictions under lockdown. Lockdown period is just like headache for those who are daily wages workers or informal sectors. And also to many famers who grow perishables. They all are facing to much difficulty to survive. There are certain businesses like hotels, airlines, restaurants cutting their employees salaries and terminating them. The loss of ₹3,000 crore has been reported by live event industry.

Raw items and spare parts

Near about 55% of electronics items in our country imported form china. It has been decreased and lied upon 40% due to epidemic COVID-19. In the precautionary view our country has started indigenisation of these items to control dependency upon other countries. China is a third largest exporter of India for ram materials such as organic chemicals, mineral fuels, cotton, etc. And lockdown will effect directly in trading.

Medicines 

Firstly, the vital concern is about medicine industries, India imports 70% of  Active Pharmaceutical Ingredients (API) from china. These API’s are essential for our country to manufacture medicines to medicine manufacturing companies. As we know that COVID-19 is spreading in our country, due to COVID-19 medicines are now in number one consumer’s demand. And API’s are not enough in our country to manufacture medicines to fulfil their demands. It’s directly affecting in the prices, that shows in a rising scale. Vitamins and penicillin prices already have been increased up to 50%.

Tourism

In India there are lots of cultural and historical places. And these places attracts to domestic and foreign people. Throughout the year lots of tourists visit these places including of domestic and foreign. So it’s the source of income for our country. As we know that in our country large number of COVID-19 cases has been found including of foreign tourists. Considering all these points all visas has been suspended and requested to go back to their country for this time period. However it also effects to all those who indirectly link with tourism such as hotels, restaurants, agents, guiders, operators. They all are dealing with losses of thousands of crores. Tourism in India is a important factor for it’s economy. In 2008, 9.2% of India’s GDP generated by tourism. And now the graph is going down. 

Aviation

After suspension of all visas by Government of India, near about 600 international flights to and from have been cancelled. About 90 domestic flights have been cancelled. And it decreases the fares of airlines, even on popular local routes.

Remote working

The major step “lockdown” taken by Government, organizations have no other option to take a pause in their business and look for precautionary measures. When the first case of COVID-19 was confirmed in India, many firms have taken a steps and give permission to their employees for “work from home”. But this option not fit for many other sectors such as hospitals, retail, manufacturing companies, field area works. And there is no option for them in spite of pausing them.

Stock market

On 23 march 2020, stock markets in India has shown the nastiest losses as we compare to the back history. SENSEX has fallen 4000 points, and NSE NIFTY fell 1150 points.

And just after one day of completion of lockdown(on 25 March), 21 days of nationwide lockdown had been announced by our PM and then SENSEX reported huge gain as compare to 11 years. Added value of ₹4.7 lakh crore for investors.

Supply of goods

Due to the lockdown supply of various things have been broken. Britannia industries are supporting to lockdown and advising the Government to certify that inter state movement of raw materials for food processing industry will not be harmful. The Managing Director of Britannia said that “if the one link in the supply chain is broken, the country could run out of stocks of food package in just next 7-10 days.” Even inter state movement has been banned by the Government, but it’s not applicable for essential things.

On 29 March Government has announced that supply of both essential and non-essential are allowed all over the country during the lockdown including of milk and newspaper supply.

Agriculture

Due to lockdown, In tea states farmers are unable to harvest their first flush. And it’s not specified that what will be the impact upon second flush. The whole Darjeeling tea based industries will be going to face downfall in their earnings. And this would effect the exportation of tea which could drop up to 8%.

Under the new guidelines issued by Government, the agricultural businesses like dairy, tea, coffee and rubber plantations including of shops and industries will be reopen from 20 April.

Migrant workers and labour force

In this situation, there is no work for daily workers during this period. And all the movements of buses and trains have been restricted. Then it results in large number of workers come in roads and start walking towards their villages, some of their journey is hundreds of kilometres long.

After that central Government has taken a step issued a directive, State Governments has set up around 21,000 camps to give the shelter to 660,000 migrants and get rid of this crowd. Delhi Government is feeding free to 4,00,000 people everyday. And 500 hunger relief centres have been established by Delhi Government.