write a paragraph of impact of covid-19 in our Indian economy
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Economic impact of the COVID-19 pandemic in India
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Main articles: COVID-19 pandemic in India and Financial market impact of the COVID-19 pandemic
The economic impact of the 2020 coronavirus pandemic in India has been largely disruptive. The World Bank and rating agencies had initially 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. However after the announcement of the economic package in mid-May, India's GDP estimates were downgraded even more to negative figures, signalling a deep recession. On 26 May, CRISIL announced that this will perhaps be India's worst recession since independence. State Bank of India research estimates a contraction of over 40% in the GDP in Q1 FY21.
Economic impact of the COVID-19 pandemic in India
IMF World Economic Outlook April 2020 Real GDP growth rate (map).svg
Map showing real GDP growth rates in 2020, as projected by the IMF.
Date
March 2020 – present
Type
Global recession
Cause
COVID-19 pandemic-induced market instability and lockdown
Outcome
Sharp rise in unemployment
Stress on supply chains
Decrease in government income
Collapse of the tourism industry
Collapse of the hospitality industry
Reduced consumer activity
Plunge in fuel consumption. Rise in LPG sales.
Within a month, unemployment rose from 6.7% on 15 March to 26% on 19 April.[1] During the lockdown, an estimated 14 crore (140 million) people lost employment.[1] More than 45% of households across the nation have reported an income drop as compared to the previous year.[2] The Indian economy was 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.[3][4] Under complete lockdown, less than a quarter of India's $2.8 trillion economic movement was functional.[5] Up to 53% of businesses in the country were projected to be significantly affected.[6] Supply chains have been put under stress with the lockdown restrictions in place; initially, there was a lack of clarity in streamlining what an "essential" is and what is not.[7] Those in the informal sectors and daily wage groups are the most at risk.[8] A large number of farmers around the country who grow perishables are also facing uncertainty.[7] Various businesses such as hotels and airlines, are cutting salaries and laying off employees.[9]
Vendor of greens, essential supply chains and logistics. Life under lockdown. Bangalore spring 2020.
Major companies in India such as Larsen & Toubro, Bharat Forge, UltraTech Cement, Grasim Industries, Aditya Birla Group,BHEL and Tata Motors have temporarily suspended or significantly reduced operations. Young startups have been impacted as funding has fallen.[10][11] Fast-moving consumer goods companies in the country have significantly reduced operations and are focusing on essentials. Stock markets in India posted their worst loses in history on 23 March 2020.[12] 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.[13]
Indices: S&P BSE 500 (1 January 2015 to 9 May 2020)
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 26 March a number of economic relief measures for the poor were announced totaling over ₹170,000 crore (US$24 billion). The next day 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 3 April the central government released more funds to the states for tackling the coronavirus totaling to ₹28,379 crore (US$4.0 billion). The World Bank and Asian Development Bank have approved support to India to tackle the coronavirus pandemic.[14]
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 would take effect from 20 April.[15] 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.[16] On 18 April, to protect Indian companies