Our Bureau New Delhi
The COVID-19 pandemic has withered the Indian Economy by bringing it to a halt. The impact of the lockdown ranges from rich to poor. a sharp decline was noticed in India’s industrial production from April when the state went into lockdown and most of the production houses were shut completely. The index of commercial Production contracted by 55.5% compared with a similar period a year earlier which has sectors like mining, manufacturing and electricity. a pointy decline was also observed in Domestic travel and tourism sectors which contributed to the fall in services commercial activity.
Even before the lockdown, Indian economy has been facing jobless growth i.e. a situation where GDP grows but employment remains stagnant or falls and if this trend continues further, the economic recovery will take an extended time. Without enough jobs, households incomes are going to be under strain and therefore the economic recovery are going to be sluggish. The decrease in household expenditure since lockdown has had a very damaging impact on smaller businesses, which have already been plagued by the demonetization policy of 2016, and also the goods and services tax (GST) being introduced by the govt in 2017. It must be noted that Indian banks were already bruised before the arrival of COVID-19 pandemic and their condition is anticipated to deteriorate further as bad loans dent their profitability in the current economic conditions. This could put one more brake on the economic recovery.”
Remarkable work by Himachal Pradesh Govt.
The Government of Himachal Pradesh was among the primary ones within the country to require the precautionary step of implementing a strict curfew, not just a lockdown, to manage the spread of coronavirus. Subsequently, the government scaled up COVID-19 testing rapidly, so much so, that between 28 March 2020 and 29 April 2020, a jump of 3500% in the number of individuals tested for coronavirus was witnessed. Shri Narendra Modi, Hon’ble Prime Minister of India during a video conference with the Chief Ministers of all states, appreciated the govt of Himachal Pradesh for effectively implementing the Active Case Finding (ACF) campaign. Under ACF, ~16,000 ASHA (Accredited Social Health Activists) and Anganwadi workers, went door-to-door to gather health information of each individual residing within the state (~70,00,000) after the state-wide curfew was implemented and shared it with Department of Health.
Image of Hon’ble Narendra Modi appreciating Himachal government through Video Conference
Recovery of Indian Economy Post Covid-19 Pandemic
With the companies across the state handling losses, there are fresh challenges to tackle the spread of COVID-19 once the economy reopens. The virus is spreading at a greater pace in India because the country might not able to afford further restrictions and therefore the economic activity restores back to normality. “The risk would emanate from the longevity of the Covid-19 and also the extent of the dent caused by it to the economy,
Most economists are unanimous that in the current fiscal year, India’s economy will contract. The difference of opinion is barely about the extent of this contraction. The range varies between minus 4% to minus 14%. Many economists are of the opinion that after hitting the lowest this year, the economy will start its recovery in fiscal year (2021-22).
The weakening of companies and also the crippling of India’s informal sector are major problems. “Balance sheets within the financial sector and a few corporate sectors have deteriorated during the downturn and will present a hurdle to the recovery
The recent trends shows that India’s economic recovery is more likely to be a ‘U’ or ‘W’ shaped instead of ‘V’ because the impact of COVID-19 are going to be profound on a nation that was already struggling for growth before the pandemic, analysts said. As per the reports of Centrum Institutional Research, “Before the onset of COVID, Indian economy had bogged down to 4.5 per cent GDP growth, not participating within the global resurgence of 2018 and 2019”.For India, the outbreak of pandemic came at the most inopportune time because the economy showed nascent signs of recovery after bold measures, from both the Govt and the reserve bank of India
The future of Indian Economy will highly rely upon important factors like the overall duration of the pandemic, the effect on jobs and household incomes, the extent of fiscal stimulus provided by the Govt etc. It is true we’ve not found the cure for COVID-19 pandemic so far, but we are seeing the planet finding ways to undertake to return to ‘new normal’,” “as work from home” has become the most effective alternative to stay the economy running during the difficult COVID-19 times. Work, Education, Grocery markets etc. have all been using online mode of work to stay their businesses running, however this has also brought opportunities and difficulties both. Many major industries like aviation, entertainment and real state have witnessed a permanent damage by the arrival of COVID-19 pandemic, adapting to the changing times to become capable to deal with the pandemic and to make sure revival of the Indian Economy and progress of the state seems to be the foremost practical way, which may be a challenge as well as a chance for Indian Economy post COVID-19.