What is the impact of Covid19 on the Indian Economy?

What is the General Impact of Covid19 on the Indian Economy?

If you want to know-

Impact of Covid19 on the Indian Economy or

Economic Impact of the Covid19 pandemic in India or

How will Covid19 damage the Indian Economy ? or

How will Corona virus affect the Indian Economy?

Then you are at right place…

Image Source: Google | Image by-Hindustan Times paper Date-March 18, 2020| Illustration-Uday Deb

We are eyewitnesses of new pandemic of 21^st century named Covid19 . It spun out of control very fast over the world in the year 2020. It affected the whole world in every perspective like economically, medically, culturally, religiously, politically, technologically, socially, and so on………. But here our main concern will be how it (Covid19) affected the Indian economy.

COVID 19 started in Wuhan, city of China and it spread in Wuhan very soon, so China took decision to lockdown and this decision was very successful in checking the pandemic. When it started becoming a form of pandemic, other countries did the same as a tentative action. But this lockdown affected badly to the economies of all countries including India as well.

Some works and economic actions are going on because of internet like computer based engineering service, online teaching, financial services, some legal services, limited ecommerce services, etc. But most of the work has stopped or scaled down like MSME(micro, small and medium enterprises), manufacturing industries, repairing work , transportation, tourism, retail shopping, etc  and the work which is itinerant, experiencing inefficiency. I will try to give you overview of some important and popular works and actions which are struggling due to pandemic.

Media:

Media is facing bad days in the profit perspective. There is a rational thinking that economy will be in prolonged downturn so media are not getting as much advertisements as before.

Manufacturing Work: 

If we consider about a country like India manufacturing industries are the biggest job suppliers ( after agriculture in India) are under recession, will further increase the unemployment rate.

 Due to lockdown general transportation has checked so raw material for industries and final ready goods for consumers are not being transported (except essential goods) so businessmen couldn’t produce enough goods to avoid any loss and hence they are unable to provide job as before.

 So there is huge unemployment being generated due to lockdown. To avoid Covid19 outbreak people are asked to keep ‘social distancing’ and industries are asked to shut down.(please note don’t use the word “social distancing ” because it has bad sense , so use “physical distancing” instead).

MSME: 

MSME (micro, small and medium enterprises) are suffering more as compare to larger industries. More easily you can understand as, less the size of business/enterprises, more will be the bad impact on it.

Since MSME has less capital (human as well as goods capital), therefore they won’t last long in the economy during lockdown so there will be very much job loss (at first people will be unemployed in these sectors and later from other sectors).

Unemployment will also rise in the large sectors especially in the ‘non essential goods’ producing industries.

Aviation:

Aviation sector are suffering terribly and there is possibility of  jobs loss in this sector.

Road Transportation:

Buses, Taxis, Cab (like OLA-UBER), Autos, etc have stopped and in near future these services are not going to be in boomed situation. But due to COVID19 it’s possible that people will prefer cab or private taxis or auto in late future but in the case of India where so many people are poor it’s quite unpredictable what will be the real scenario in late future.

Banks: 

Banks were already suffering with NPA’s and now in the situation of lockdown, situation may become terrible. Supply and demand both are temporarily scaled down for non essential goods. But in long run it depends on government policies, business strategies and the most important human behavior to the market.

Share Market:

In share market foreign investors through FPI withdrew their money, even Indian rich people also withdrew their money very first and as always middleclass people are suffering with their losses.

Student’s based economy: 

There are many cities in India like Kota, Prayagraj (Allahabad), Patna, Delhi,  etc where, there is Coaching Hub or University(or Universities),  students play a big role in that city economic activity specially for middle class and poor class family, have affected local economic activity badly.

Economic activity like offline coaching, rental room, chai-nashta shop, local transportation, local clothe shop, shoes shop, RO water shop, cafe, and so on are badly affected in these cities.

But it is worth mentioning that test series, online courses etc have boomed in the lockdown!!!

Agriculture:

There will be no impact on agriculture for short time (say one or two month) but when the new season will start, farmers need new seeds, fertilizers, pesticides etc. And also need some new machines like tube-well, tractor etc which become defective and useless.

So if lockdown persists long time then definitely agriculture sector will also suffer and don’t forget our “Food Security” mainly depend on agriculture.

Suggestions:

Policy Certainty: 

There must be certain policy measures that should be adopted by the government so that government administration and public can take rational decisions for their work.

Otherwise everyone will follow their own decisions and situation can get worst not only in running economy but also in fighting with Covid-19)

For example- On 3^rd of May, government opened the liquor shops, public gathering (violation of physical distancing) became unmanageable for the administration. It happened because public didn’t know either liquor shops would remain open or that would be closed!!! ,

 If public had known whether policy measures would be adopted regarding the liquor shops then there would be no such crowding and administration could manage the crowd.

An image of people buying alcohol in Delhi, stripping of physical distancing

Every person should do work:

Economy runs  when one person produces some goods/services and get money (paid) in return, similarly if a person want some goods or services then he has to pay money to other. In other words there is trade-off between money and goods/services.

An image representing economy cycle

So everyone should do any work regardless what is one's status or eligibility. Don’t be shy to do any work even a so called low status work, for example if you are eligible for teacher or engineer and you are unemployed at home then don’t be shy to do any work like making mask, giving tuition, farming, retailing etc. It will not only help in your income but will also contribute to National Income.

 And don’t forget pandemic will not last long, so do any work temporarily, it will help you not only in generating income but also you will get a taste of work apart from your profession and a new very interesting experience.

                    Thank You 😊!!!

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