The present article is written by Poonam Ramasaware Yadav and Kopal Khanna under the National Article Writing Competition organised by LeDroit India discussing about the impact of covid-1 on the sectors of Indian economy.
The entire world is in the claw of coronavirus its effect on public health being so vulnerable that it made the World Health Organization (WHO) to declare it as a pandemic. The virus was first identified in China in December 2019. Due to this pandemic it has forced the entire world to go under strict lockdown. Now the whole world is fighting with the invisible enemy. In India the first case of coronavirus disease was reported in Kerala 30th January 2020. Multiple cases were then reported in different cities of India. As most of the countries are under lockdown social and economic conditions has come to a halt. The metro cities like Mumbai, Delhi, Ahmedabad, Kolkata, Chennai which are densely populated has given speedy rise in cases of covid-19. These cities are the major contributor of the Indian economy. The pandemic has led to socioeconomic disruption, inhibiting the growth of entire economic environment especially the developing countries. In this article we are going the see the impact of the coronavirus in different sectors of Indian economy.
- To highlight the impact of coronavirus in different sectors of Indian economy.
- How India being the emerging economy in the world can gain importance in the Global market in the post pandemic period.
- To specify the strategies for the revival and sustainability of the Indian economy.
Impact of Coronavirus in Different Sectors of Indian Economy
According to FICCI the Indian economy has been experiencing significant slowdown over the past few quarters. In the third quarter of the current fiscal, the economy grew at six year low rate of 4.7%. Tourism, Hospitality and Aviation are among the worst affected sectors. Consumption of both essential as well non essentials items has come to a standstill due to reduce in purchasing capacity. The coronavirus has affected daily wage worker due to halt of infrastructure works, hotels, transport etc. Due to widespread fear and panic among the people due to the current pandemic and its unpredictability on the current economy in the national as well as international level had shaken the confidence in relation to demand side of the economy.
Due to greater uncertainty of the future, the prevalent COVID-19 has also made the Financial Market extremely volatile. On March 12 both BSE Sensex and NSE Nifty crashed by more than 8% in a single day. The equity market is likely to remain volatile in future to due to the increase rate of coronavirus cases.
India is highly dependent on China in relation to manufacturing sectors; the goods are supplied from China to India for the manufacturing purpose. Due to this pandemic manufacturer are unable to import good to make the finished product. Some sectors are facing shortage of raw materials especially in automobiles, pharmaceuticals, chemicals etc.
India is an important trading partner with many countries across the world. International Trade has also been hampered due to novel coronavirus. India is running through trade deficit, the gap between country’s import and exports has been steadily declining since March. India is highly active in export of pharmaceuticals, chemicals, engineering goods, jewellery, textiles, food commodities etc. which has aided India to grow in global market. About 31.9% of Indian population is employed in service sector which contributes about 54.3% of the GDP. This sector has been affected due to layoff, retrenchment, unemployment in large number, shutting down of small companies having greater impact on the consumption power of the people. India is going through worst recession in current Fiscal as per CRISIL after 1980.
Initiative taken to revive the Economy during this Current Pandemic of COVID-19
The first initiative is to control the spread of novel coronavirus till the time there is no vaccine. The government had issued advisory guidelines to follow social distancing and work from home in various sectors, etc. As per the latest world economic outlook published by International Monetary Fund (IMF) in mid-April, both India and China remain the only two large economies which won’t see a contraction due to onset Global recession by the current pandemic. According to Association of Southeast Asian Nations (ASEAN), will be the drivers of post COVID-19 recovery in the coming decade. Reserve Bank of India had announced measures to counter the economic impact of the pandemic including Rs 50,000 crore special finance to NABARD, SIDBI and NHB. Providing more relief to state government.
India also changed its FDI policy to protect Indian companies from opportunistic acquisition during the COVID-19 pandemic. On 16th May Finance Minister announced amendments to the Essential Commodities Act, as well as opening up of the Défense sector, Power sector and Space sector. India has also been witnessing a pre-pandemic slowdown. Many initiatives have been taken by the government to overcome the current economic crisis due to COVID-19.
Post Pandemic Strategy to Overcome the Current Economic Crisis.
- Managing the control of the spread of coronavirus and providing cheap medical assistance to the affluent section of the society. It is said without health an individual cannot achieve anything. Health should be the first priority by providing medical insurance.
- To protect the income and employment of the most vulnerable section of the society by implementation of direct cash transfer programs.
- Companies need to figure out the availability of workforce as all the migrants workers went to their home due to the lockdown. To support the corporate sector to minimize adverse economic impact and facilitate quick recovery to reposition India in the worlds global value chain.
The entire world is in the grip of vicious coronavirus. The pandemic has sparked global health emergency inclusive of social and economic crisis unleashing unavoidable collapse of economic activities. All the sectors contributing to economy should prepare it for the upcoming uncertainties and challenges cropping out of novel coronavirus. We need to apprehend probable impending changes in business environment and should identify the opportunities in order to strive and thrive.