what is the impact of Indian economy on the lock down because of Covid-19
Answers
Explanation:
The economic impact of the 2019–20 coronavirus pandemic in India has been hugely disruptive. World Bank and credit rating agencies have downgraded India's growth for fiscal year 2021 with the lowest figures India has seen in three decades since India's economic liberalization in the 1990s.[1][2] However, the International Monetary Fund projection for India for the financial year 2021-22 of 1.9% GDP growth is the highest among G-20 nations.[3] Within a month unemployment rose from 6.7% on 15 March to 26% on 19 April.[4] During the lockdown, an estimated 14 crore (140 million) people lost employment.[4] More than 45% of households across the nation have reported an income drop as compared to the previous year.[5]
The Indian economy is expected to lose over ₹32,000 crore (US$4.5 billion) every day during the first 21-days of complete lockdown which was declared following the coronavirus outbreak.[6][7] Under complete lockdown less than a quarter of India's $2.8 trillion economy is functional.[8] Up to 53% of businesses in the country will be significantly affected.[9] Supply chains have been put under stress with the lockdown restrictions in place; initially there was a lack of clarity in streamlining what is an "essential" and what isn't.[10] Those in the informal sectors and daily wage groups are the most at risk.[11] A large number of farmers around the country who grow perishables are also facing uncertainty.[10] Various businesses such as hotels and airlines are cutting salaries and laying off employees.[12] The live events industry has seen an estimated loss of ₹3,000 crore (US$420 million).[12]
Major companies in India such as Larsen and Toubro, Bharat Forge, UltraTech Cement, Grasim Industries, Aditya Birla Group, Tata Motors and Thermax have temporarily suspended or significantly reduced operations. iPhone producing companies in India have also suspended a majority of operations. Young startups have been impacted as funding has fallen.[13][14] In the third week of March, Amazon and Walmart-owned Flipkart stopped sale of non-essential items in India so that it could focus on essential deliveries.[15] Other fast-moving consumer goods companies in the country have significantly reduced operations and are focusing on essentials. Some defense deals have been affected/delayed due to the pandemic such as the delivery of Dassault Rafale fighter jets. Stock markets in India posted their worst loses in history on 23 March 2020.[16] However, on 25 March, one day after a complete 21 day lockdown was announced by the Prime Minister, SENSEX and NIFTY posted their biggest gains in 11 years, adding a value of ₹4.7 lakh crore (US$66 billion) crore to investor wealth.[17]
"From the economy's point of view, the lockdown undoubtedly looks costly right now, but compared to the lives of Indian citizens, it is nothing." (translation, original in Hindi)
Prime Minister Narendra Modi, speech to the nation, 10 am, 14 April 2020, [18][19]
The Government of India has announced a variety of measures to tackle the situation, from food security and extra funds for healthcare, to sector related incentives and tax deadline extensions. On 27 March the Reserve Bank of India also announced a number of measures which would make available ₹374,000 crore (US$52 billion) to the country's financial system. On 29 March the government allowed the movement of all essential as well as non-essential goods during the lockdown.[20] On 1 April, World Bank approved $1 bn in support to India to tackle the coronavirus pandemic. On 3 April the central government released more funds to the states for tackling the coronavirus totalling to ₹28,379 crore (US$4.0 billion). On 6 April a 30% salary cut for one year was announced for the President, Prime Minister and Members of Parliament.[21]
On 14 April 2020, the Prime Minister of India extended the lockdown to 3 May. A new set of guidelines for the calibrated opening of the economy and relaxation of the lockdown were also set in place which will take effect from 20 April.[22] On 17 April, the RBI Governor announced more measures to counter the economic impact of the pandemic including ₹50,000 crore (US$7.0 billion) special finance to NABARD, SIDBI, and NHB.[23] On 18 April, to protect Indian companies during the pandemic, the government changed India's foreign direct investment policy. The Department of Military Affairs has put on hold all capital acquisitions for the beginning of the financial year.
On 24 March the Press Information Bureau brought out a fact check that stories about a financial emergency being imposed in India are fake.[24] A financial emergency has never been imposed in the history of India as yet.[25] On 4 April, former RBI chief Raghuram Rajan said that the coronavirus pandemic in India may just be the "greatest emergency since Independence".[26]