The greatest pandemic the world has faced after World war II has its name as Noval Coronavirus or to shorthand it as COVID-19. This virus made its way in December 2019, through Wuhan city of China and since then has been spreading across the globe at an increasing pace. To date, more than 200 nations have been affected by the outbreak of corona, and the loss it has made or is making to human life is unexpected.
It has not made its feet limited to human lives but has started to work as a termite to economic life as well. The global economic impact that this virus has been making is way broader than our imagination.
The COVID-19 outbreak has left no sector untouched. It has marked its footsteps in almost every sector of the Indian economy leaving us with a road full of bumps to be covered over the shortest period to incur the least possible losses.
India is no exception; the already degrading Indian economy is going to have an extremely bumpy path ahead. The Indian GDP for the financial year 2021 by various renowned bodies like World Bank and credit rating agencies is seeing a vulnerable downfall amidst this lockdown. The Indian monetary fund has made a 1.9% GDP projection for India which is supposed to be the highest among G20 nations.
In one of the joint survey conducted by FICCI and tax consultancy Dhruva, “tremendous uncertainty” is expected to be seen in the business sector in India. Among the 380 companies that were undertaken for the survey, 70% of them have already stated that they are going degrade their sales as well as have some reduction in manpower to cope up with losses.
The unemployment rate in India has increased almost four folds in the last one month; it was projected to be 6.7% by March 15th, 2020, and has grown up to touch a high mark of 26% by April 19th, 2020. About 140 crore people have been unemployed all over the world during this lockdown.
Adar Poonawalla, CEO of Serum Institute of India have clearly stated in their respective statements that if the lockdown continues India is likely to see a huge death toll due to hunger and economic downfall rather than the outbreak of this pandemic. The daily wage workers are left jobless and even homeless due to this pandemic and in a country like India’s hand to mouth labor force counts for a huge percent of the population. Small traders & laborers are the worst hit
Around 53% of the businesses are going to see a significant effect of this pandemic. Laying off employees, reducing their salary by a huge percentage can be very well seen in even the big names that we have in the Indian industries. The auto industry, the aviation industry, the tourism sector tops the list of businesses affected by this virus.
- AUTO INDUSTRY
The auto industry in India accounts for about 10 percent of the GDP and it employs roughly 40 million people. This sector was already seeing a decline in sales and the COVID-19 outbreak has added to its losses. With such situations going around, it is even difficult for the company to retain such a huge workforce.
- TOURISM AND AVIATION INDUSTRY
The tourism and aviation sector contributes to roughly about 9 percent and 2.4 percent respectively towards the GDP. The impact on these sectors can be very well figured out by the closure that has been faced by a few. They are constantly having layoffs and are cutting salaries to a huge extend. About 42.7 million people get a job in this sector, which is on the verge of losing their livelihood.
- IT SECTOR
IT sector functions as the main key in the Indian economy but shortly is going to lose its immunity towards this pandemic, as the IT sector gets a major portion of its business from North American and European countries which themselves are severely impacted by COVID-19.
- MANUFACTURING AND E-COMMERCE INDUSTRY
Popular names in the market like L&T, UltraTech cement, Grasim, and many more have lessened their production, to, meet there needs. The e-commerce brands such as Amazon, Flipkart lost their pace in this lockdown, as they were allowed to sell only essential goods. Keeping in mind the social distancing norms even swiggy and zomato were not allowed to function in many areas.
- LOCAL BUSINESS
The supply chain constraints that are applied amidst this lockdown have not even left the online businesses to flourish. There is a big sector that has had an all-time impact on the market, these are the local businesses. This part of the economy is going to face immense loss due to social distancing. The stress on supply chains and the reduced customer activity that we are seeing and will see in the future will account for a negative graph for many such small or local businesses.
- FOOD INDUSTRY
The food industry, restaurants, malls are going to a shortfall of money to survive the loss that we are facing.
The economic crisis that we are going through will leave us in a state that would be the greatest crisis that India has suffered post-independence. As Narayana Murthy stated “What is important for us to understand is that India cannot continue in this situation for too long. Because at some point of time, deaths due to hunger will far outweigh deaths due to coronavirus,”
So, we should come out from this lockdown to the fastest possible and as said by many doctors, economists and politicians we should adapt to herd immunization i.e. start to live with the pandemic and get ourselves immune to it. We should also come up with more medical facilities and fix our market places in a way to cope up with such pandemics in the best possible way in the future.
Though these are a tough time for all, I would like to say that we need to adapt to this “new normal”. It has been rightly said by Einstein “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.”