Business

Economic Impact of Novel Coronavirus in India

By Zeya Qamar

The Indian economy was already in a developmental stage and various measures were taken up by the govt to improve the economic condition. But the Novel Coronavirus economic impact has derailed the whole system drastically. The economic development of any country is dependent on internal and external factors. Internal means the domestic economic condition and external means of the overseas economic condition. Both are interlinked with each other. Since it’s a global pandemic so the impact is across everywhere. The economic impact of Coronavirus is at multiple levels.

Deadly Corona Virus

The Indian Economy is poised to lose a whopping 32000 Cr (US4. 5$Billion) per day due to the lockdown of the initial 21 days announced by the Hon’ble PM Mr. Narendra Modi due to the Coronavirus outbreak. Everything comes to a standstill due to the sudden and unprecedented lockdown which the nation has ever witnessed. The global credit rating agency and the World Bank have downgraded India’s growth due to the Novel Coronavirus economic impact for the fiscal year 2021 which is the lowest in the past three decades, and since the economic liberalization in the 1990s.  However, the IMF has projected 1.9% GDP growth for the financial year 2021-22 which is the highest among the G 20 nations.

As per the report, approximately 53% of the total businesses are expected to bear the brunt of this lockdown. The supply chain system is the backbone of any economy and the govt has tried its best so that the supply of essential services should not be impacted. People who work in the informal sectors, daily wage earners, laborer, has suffered the trauma of this lockdown and are at risk due to the lack of food and security. The farmers who grow perishable across the country are under extreme stress and uncertainty to get their investment back. Airlines, Hotel Industries have either cut the salaries of their staff or are many, have been handed over the pink slips. Many private and public sector companies have either suspended their operations or have significantly reduced their operations. An estimated loss of Rs.3000 Cr (the US $ 420 Million) is expected to hit the live events industry.

ECommerce giants like Amazon and Flipkart have stopped the selling of non-essential items from the third week of March and focused on selling the essential items only. Many FMCG companies have reduced their operations domestically and focused only on essentials. 

The Indian government has announced a slew of measures to fight the Novel Coronavirus economic impact of food security, extra funds for the healthcare, direct money transfer into the accounts of the poor who are having a Jan Dhan account. Other states head, The Chief ministers and the respective heads of the states have announced several relief packages for the poor and underprivileged sections so that no one could suffer. The RBI has also announced a slew of measures by pumping Rs 3,74,000 crores (the US $52Billion) into the country’s financial system.

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