"INDIAN ECONOMY UNDER PANDEMIC | How Was The Economy In India During COVID-19?"
"INDIAN ECONOMY UNDER PANDEMIC | How Was The Economy In India During COVID-19?"
With the outbreak of the global pandemic in 2019 and 2020, many Countries
had experienced a sudden and massive disruption in the global supply chains
and had later affected commodity demand of goods in various countries.
Keeping in mind Global pandemic one can analyse what would be the
impact of pandemic to the Indian economy on unemployment tourism and
hospitality sector, civil aviation, Automobile industry, Textile industry,
Agriculture and food processing, Real estate etc.
How an Unemployment is Effected Due to Covid-19?
Coming to the onset of the covid-19 pandemic, unemployment rose
from 6.7% on March to 26% on 19 April. During the lockdown, an estimated 14
crore people lost employment while salaries were cut for many others. More
than 45% of households across the nation have reported an income drops as
compared to the previous years. The Indian economy was expected to lose
over ₹32,000 crore every day during the lockdown up to 53% of business in the
country were projected to be significantly affected. Those in the informal and
daily wage groups have been at the most risk international labour Organisation
has estimated about 40 Crores workers of unorganised sectors to be
unemployed.
Impact of COVID-19 on Tourism and Hospitality Industry in India
Another Major sector which had drastically affected the global
growth is the tourism and hospitality sector. This sector does play a crucial role
and can be considered as one among the veins of the global economy in
general and India in particular.
Out of the total GDP this sector contributes approximately 9.2%. This
sector provides employment opportunities to more than 4 crores of people,
because of pandemic nearly 3.8% of the people lose the job. According to one
estimation lockdown further aggravates the problem. Even if pandemic ends
for two years this sector is not getting revival. According to the estimation 60%
of the people are either cancelling their tour or postpone for two years.
Taking the scenario of the covid-19 pandemic, this industry facing a
loss of USD 22 million people being laid off due to less demand for tourism,
being faced with the crisis globally.
More than that talking about statistics, recently FAITH (Federation
Association of tourism and Hospitality) had issued a statement that over 95%
MSMEs of 53,000 travel agents, 115,000 tour operators, 53,000 hospitality
services and over 5 lakh restaurants in India are facing the problem lack of cash
flow. The sector which usually receives 3.16% of capital inflows has now been
drastically reduced due to the reduction in both domestic and international
travels which is being faced globally.
How Has The Covid-19 Pandemic Affected The Automobile Industry?
To add further these become one among the sectors to highly depend on majority of imports of either gross foreign value added components or as entirely an importer of finished goods from majority china. The automobile industry prior to unleash of the global pandemic had been facing a situation of drastic fall in its demand. Due to pandemic large number of labourers being laid off within a short span of time. Because of uncertainity and economic crisis most of the consumers are postpone their purchase their of automobile.Coming to the onset of the covid-19 pandemic, this further depleted
the chances of the sector for recovering from its downfall. Both the global
supply chain as well as their remainder of its work force had been entirely laid
off. Due to the work being brought to a sudden stand still. According to the
society of Indian Automobile manufacturers (SIAM) the day-to-day losses in
production for the auto firms to be around Rs. 2,300 Crores by the end of April
2020.
In the scenario of the lockdown period. Major companies in
India Such as Larsen and toubro. Bharat Forge, Ultra Tech Current the fashion
and retail wing of Aditya Birla group, Tata motors temporarily suspended or
reduced operations in a number of manufacturing Companies in India also
Suspended as a majority of Operations.
The impact of COVID-19 on the economy is no doubt deva stating.
No Sector has its impact. Its import on agriculture is complex value chain. Even
among the different segments, its impact varies widely among different
regions and among producers and agricultural wage labourers. This impact will
reverberate across the larger economy and will linger longer than a few
months. The problems in agriculture at the moment are primarily related to
a) Labour availability andb) Inability to access markets for produce due to issues in transportation as well operation of markets.
India is a developing country. The position of India’s Micro, Small and Medium Enterprises (MSME) is the largest in world after china. MSME plays a significant role to accelerate the growth of Indian economy. But the position of MSME will, be very unimaginable and unpredictable after this epidemic.
CONCLUSION: This corona Virus pandemic may complete ruin the Indian economy. The level of GDP may further fall, more so when India is not immune to the global recession. Impact, it is believed that India is more Vulnerable, since its economy has already been ailing and in a deep-seated slowdown for several quarters much before the COVID-19 outbreak became known. The prime minister of India along with his Cabinet undertaken various package measures to tackle the Challenges arising from COVID-19. In a pandemic like this, only with robust and adequate measures of the fiscal and monetary authorities, can we have liquid and smooth functioning of the financial system and ponder those who are not privileged and Vulnerable.
This Article Written By
Mr.Hareesha Acharya
HOD of Economics
Govinda Dasa Degree College
Surathkal, Mangalore
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