Essay on Impact of covid 19 on Indian economy
Covid-19 has impacted everyone in one or more of the way it has a minor impact on someone or major impact or someone else but the economy is the one that was most impacted by covid-19 and here I’m not just talking about the Indian economy but the economy of the entire world.
Even the economy of the developed countries like America and Russia were impacted majorly by the covid-19, so here we will talk about that how it has impacted the Indian economy what were the major sectors that were impacted by it, and where we stand today.
The economic impact of the 2020 coronavirus
The economic impact of the 2020 coronavirus pandemic in India has been largely disruptive India’s growth in the fourth quarter of the fiscal year 2020 went down to 3.1 %according to the ministry of statistics
the world bank and rating agencies had initially revised India’s growth for the financial year 2021 with the lowest figures India has seen in three decades since India’s economic liberalization in the 1990s.
on 26 may fissile announced that this will be perhaps India’s fourth recession since independence the unemployment that was already in large number in India before covid-19 has risen from 6.7 on 15 mars 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 draw as compared to the previous year
the Indian economy was expected to lose over 32 000 crores every day during the first 21 days of complete lockdown supply chains were under great pressure even they weren't sure about what is essential and what is not.
informal sectors and daily wage groups have been at the most risk up to 53 %of businesses in the country were projected to be significantly effective a large number of farmers who grow perishables has also faced uncertainty
the major companies the companies that I am talking about here is the one that has large market capital large revenues and a large number of employees such as Larsen and turbo etc significantly reduced operations
the young startups have been impacted as funding has fallen young startups who already require a lot of patience and hard work before covid-19 to grow now have impacted firstly because the funding has been fallen
FMCG companies that are fast-moving consumer goods companies have reduced their operations and now they're just working on focusing on essential as no one was going out during the lockdown everyone was at their home the focus of everyone was that is essential and that is what FMCG goods took advantage of.
Stock market crash
now the stock market that is is majorly impacted by the covid19 economy and stock market are interrelated whatever happens in the economy stock market deals the consequences and it shows the worst losses in history on 23 March 2020
however, on 21st March, one day after a complete 21-day lockdown prime minister Modi Ji announced that census sensing and nifty that is the index of BSc and NSC posted their biggest gain in 11 years
this was the major impact of covid-19 that we just read briefly but there are much more like they were like the tourism they were also affected mostly by the covid-19.
Effect on the Tourism sector
tourism that contributes to a good that contributes a good percentage towards GDP was stopped completely because of the covid-19.
nobody was going outside the country noble was coming inside the country so it has also failed it has also fallen sharply
now we will look at the impact of covid-19 on various sectors we have seen the impact we have seen briefly impact of covid-19.
1. export and import-export sector
Export and import-export are the goods that we sell to the other countries import are the goods that we buy from the other country now India’s export in April 2020 fell by minus 36.65 % year
on the year while imports in April 2020 fell by minus 47.36 36% as compared to April 2019 since nobody was going out even the whole world was under lockdown
The goods are produced that were produced in the country were not enough for even the for their own country so how can be enough for export and import that was the main reason that the export and imports started falling.
2. Energy sector
The sector that was majorly impacted is energy night lights and economic activities are connected in Delhi nightlight radiance fell 37.2 %compared to 1-31 March 2019, this was the biggest fall for any metro in India followed by Bangalore 32% while Mumbai dropped by 29%.
India’s fuel demand in April 2020 as compared to 2019, fell nearly 46%
consumption of fuel was the lowest since 2007. cooking gas sales rose approximately 12%
the diesel demand also dropped by approximately 6% by half first of June 2020 India’s fuel demand was 80 to 85 %of what it was before the lockdown
Oil prices that were rising sharply before covid-19 also dropped in 2020 following the covid-19 pandemic demand also fell sharply.
3. agriculture sector
we all know that agriculture is the backbone of a country and it is considered essential but covid-19 has a major impact on agriculture
A study during the first two weeks of may month by the public health foundation of India and the center of sustainable agriculture found
that 10 %of farmers could not harvest their crop in the past month and 60 %of those who did harvest reported a yield of laws and that a majority of farmers are facing problems during the lockdown
even the Darjeeling tea-based industry saw significant fallen revenue the exports could see a yearly drop of up to 8%as a result
march 2020 key exports from India fell 33 %in March as compared to March 2019. during the lockdown food wastage increase due to the effective supply chains affecting small farmers
due to the lockdown even the transportation was not moving the farmers were not able to sell their products to the market due to that many foods many crops were wasted
farmers were out of money they were not able to eat proper food even for a single day they were impacted majorly by the covid-19 situation.
4. manufacturing sector
As we talk about the companies big companies having large market share high revenue and a high number of employees like Larson and turbo, Bharat forge, tata motors, etc.
Reduce operations in a number of manufacturing facilities and factories across the country iPhone producing companies in India also suspending a majority of operations
All two-wheeler and four-wheeler companies put a stop to production till further notice many companies have decided to remain close till at least 31 marks such as cumins which has temporarily shut its offices across Maharashtra
Hindustan Unilever, Dabur, ITC shuts manufacturing facilities except for the one essential as I told you that everyone was just focusing on essentials and that what the companies took advantage of
this was the only thing from where they started they generated their revenue but that was not even enough they faced a huge loss in their revenues fall drastically in 2020, because of a covid-19 pandemic.
5. stockmarket sector
The next thing that comes is the stock market as I have told you that whatever happens in the economy stock market bears the consequences because they are interest-related.
on 23 March 2020 stock market in India posed the worse loss in its history SENSEX fall 4000 that is (13.15%) and NSE NIFTY fell 1150 Points that is ( 2.90%)
On 8 April following positive indications from wall street that dependent may have reached its peak in the u.s the stock market in India rose steeply once again
by 29 April nifty held the 9500 marks but that was not enough we have seen that even with the covid-19 cases are very high in USA stock markets show variations during the covid-19 situation that is during 2020.
6. E-commerce sectors
E-commerce sectors include Amazo,& Flipkart, etc that is our online shops now amazon announced that it would stop the sale of known non-essential items in India.
so that it could focus on needs even Flipkart, temporarily suspended some of its services on its e-commerce platform and would be selling and distributing essential only big basket and growers also ran restricted services facing description due to the lockdown.
Delhi police began issuing delivery agents curfew passes to make it easier for them to keep the supply chain open e-commerce faced many difficulties because people were due under the lockdown
they have a short of money incomes worth income has fallen many people lost their employment because of that people have stopped shopping they were not buying from these platforms from the online shops
their revenues fall drastically, even the people working under these companies even lost their jobs because the company owned cannot generate revenue for themselves.
7.state income and expenditure
state income and expenditure it was not just the people who were out of money but the state has fell state government incurred huge losses to the extent of having to cut capital expenses
the Delhi government has fallen 90 short in taxes as compared to 2019 and is planning to take loans and raise taxes in certain sectors, Maharashtra put a hold on all new capital worked in march
the income of the Madhya Pradesh government has fallen by 85 %in April and their borrowing increase because the state government was not having any income to spend,
the daily government as well as the Andhra Pradesh government imposed a 70 to 75 % corona extra tax on liquor
we all have seen that when after two or three months the liquor shops got opened the people were standing in the long queues in the long line just to buy the liquors
the excise duty on liquor is the third-largest source of income for a number of states nearly 10 to 15% of total tax collection for some state
these taxes help the government to generate some revenue for themselves so that they can spend somewhere
so these were the major sectors that I told about covid-19 has impacted the entire world majorly but these were the main sectors that were impacted by it, now the year has passed we are in 2021 and we still stand firm.
Economic recovery in the second week of may companies started preparations for the starting operation some companies opened offices with the maximum permitted strength of 33.
The beginning of June saw companies further reopen and making plans to reopen many people told that many economists or the former RBI governor showed a different kind of shade recovery
some told it would be a v-shaped recovery some told it would be a w u or l shaped recovery but India showed the recovery its stock market increases the manufacturing started reopening all the companies started reopening
even the offices have been reopened with 33 %staff with the extension of 33 % while others took a more cautious approach of as low as 5 company
a study by Killara securities incorporation founded 5 Indian states Kerala Punjab Tamil Nadu Haryana and Karnataka are contributing 27 % to India’s GDP as India emerges from a total lockdown
on 24th July 2020, Ajay Bhushan Pandey the enhancement secretary of India said that the Indian economy could revive sooner than we expect
while terun bajaj economic affairs secretary said that he expects a v-shaped recovery as I have told you that many economists and rbi governor told the various type of recovery but India has recovered a lot
we have seen the worst cases in other countries the countries fill up countries like America and Russia they are still impacted by covid-19 the debts in India were less as compared to the developed countries
India still stand firm and all thanks to our frontline workers that are our scientists our doctors and our policemen
India has started vaccination also they have created the vaccination just in 10 months and even in two months millions of people were inoculated
the covid-19 has impacted the economy majorly that I have told you the sectors but as of today we stand firm
everything is very is built better in India as compared to the other countries as compared to the world
the world bank told that India is going to face a lot of difficulties it shows a million people that were going to die but the rate is still low in India and thanks to all the people and all the frontline workers that helped us.
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