Covid-19: Implications on Indian Economy

Covid 19 has distraous effects on our economy.
Effects of Covid-19 on Indian Economy

The global death toll from Covid-19 topped a staggering 3 million people till now.   It is at its peak in countries like Brazil, India, and France. Worldwide deaths around 12000 per day on average. And new cases are climbing too, reporting 7000,000 cases a day.  The European continent has lost 1 million lives because of a more contagious variant. India alone is recording 3.14 lakhs in a day.The second wave of Covid 19- infections has implications on Indian economy causing enormous harm. The nation has reported 3.46 lakh new cases and 2624 deaths in the last 24 hours. Hospitals and health care centres are in panic due to a shortage of beds and oxygen and life-saving drugs. This has struck the nation in a paralyzing sense of fear, anxiety, trauma, and pain.

The COVID-19 is announced as a pandemic by the WHO. It has disastrous effects on the global economy, crumbling away Rs. 11.4 trillion of shareholders’ wealth. The second wave of COVID in India has brought the Indian economy in a state of uncertainty. India’s growth has downgraded to 5.3% in 2020 due to the impact of Corona. The catastrophe has affected the various segments of the economy. India’s ongoing GDP losses are likely to be $5-10 billion. The covid 19 implications on Indian economy are colossal.

The manufacturing, agriculture, oil and gas tourism, aviation, hospitality, and the pharmaceutical industry is facing challenges and finding it hard to survive. The migrant laborers rushing back to their villages in the middle of multiple curfews and semi-lockdowns. Therefore, we can say that covid – 19 implications are on all sectors of Indian ecoonomy.

The aviation and tourism sector accounts for about 2.4% and 9.2% of our GDP respectively. The tourism industry served approximately 43 million people in the year 18-19. These two industries have been facing cash flow issues. It is laying off almost 70% of the total white and blue-collar workers. These industries may incur losses of about 85 billion Rupees due to travel restrictions. The pandemic has also brought innovation in the areas of contactless boarding and travel technologies.

There has been a 20% reduction in domestic travel and about 75% reduction in international travel bookings. Hotel booking rates have also declined from 70% to 20%. And restaurant business has been a down of 30-35%.

Agriculture is an essential sector of our economy. The impact of the corona is low on both primary agriculture production and the use of agro-inputs. Online grocery stores are hugely affected due to unclear restrictions on movements and the stoppage of logistics vehicles.

The Covid -19 pandemic has affected the automobiles industry also. Passenger vehicle in India declined by 10% month on month in April. Passenger vehicle sale in March was 2,96,939 units which declined to 2,61, 633 units in April. Two wheelers dispatched to dealers declined by 33% per cent to 9,95,097 units last month as compared to 14,96,806 units in March. Motorcycle sales saw a dip of 33 percent to 6,67,841 units in March this year. Scooter sales fell 34% at 3,00,462 units from 4,57,677 units in March. Three wheeler sales also declined by 57 per cent to 13,728 units in March. Three wheeler sales also declined by 57 per cent to 13,728 units in March this year. Vehicle sales across categories declined by 30 per cent to 12,70,458 units last month as against 18,19,682 units in March. Due to lockdown supply chain related production challenges continue in many parts of the country. Moreover, the demand is also affected by the second wave of COVID 19 both in terms of low consumer sentiments and closure of dealership.

Decline In Sales

The Telecom sector contributes about 6.5% percent of GDP and employs almost 4 million people. There have been brief price wars between service providers in India even before COVID-19, consequently bringing changes in the telecom sector. Due to the implementation of ‘Work From Home’, most essential services and sectors have continued to run during the pandemic. Increased broadband usage resulted in pressure on the network., increasing the demand by 10%. In the present scenario, the government as a policy recommendation can aid the sector by relaxing the regulatory compliances which can be used for network expansions by the companies.

The pharmaceutical industry is influenced by the pandemic, there has been a rise in the prices of raw materials imported from China due to the pandemic. The government is also imposing heavily on the export of critical drugs, equipment, and PPE kits to ensure their sufficient quantity

The current downturn in the Indian economy due to the Covid-19 implications will increase unemployment and disrupt demand and supply. Adopting innovation will help businesses to cope up in this difficult times

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