Write an effective topic on the effect of covid 19 on indian economy
Answers
Answer:
The economic impact of COVID-19 is very disturbing. No one has been spared of its ill effects. Economies of about 100 plus countries have been destroyed out of which some of them have asked for monetary help from IMF. Businesses across the world namely hospitality, entertainment, aviation etc have seen a major negative impact. Various sports events such as IPL and Olympics have been postponed. Schools and colleges have been closed. The virus has also disrupted the functioning of various online giants such as Amazon. Countries such as USA, Italy and Spain are suffering the most since their death toll is very high.
Impact on Economy:
There is a big shift in the world economic market and the share market has witnessed crashes day by day. Factories, Restaurants, Pubs, Markets, Flights, Super Markets, Malls, Universities and Colleges etc. were shut down. Fear of corona virus has limited the movement of the individuals. People were not even going to buy the daily essentials and these all were somewhere impacting the economy of the world as a whole. The Organization for Economic Co-operation and Development (OECD)reveals that they have cut their expectation for global growth to 2.4% from 2.9%, and warns that it could fall as low as 1.5%.
India faces a huge decline in government revenues and growth of the income for at least two quarters as the coronavirus hits economic activity of the country as a whole. A fall in investor sentiment impacts privatization plans, government and industry.
The lockdown in India will have a sizeable impact on the economy mainly on consumption which is the biggest component of GDP.
India’s total electronic imports is equal to 45% that of China. Around one-third of machinery and almost two-fifths of organic chemicals that India purchases come from China. For automotive parts and fertilisers China’s share in India’s import is more than 25%. Around 65 to 70% of active pharmaceutical ingredients and around 90% of certain mobile phones come from China to India.
Disruption of supply chain and global trade
Covid-19 has disrupted global supply chains and this is generating spill over effects throughout different levels of supplier networks. Global trade in 2020 will fall in every region of the world, and will affect all sectors of the economy. This will impact countries that are strong exporters (no output for their local companies), but also those that are importers (lack of raw materials). The World Trade Organization (WTO) expects global trade to fall up to 32% this year due to the coronavirus pandemic.
Conclusion
A global recession now seems inevitable. But how deep and long the downturn will be depends on the success of measures taken to prevent the spread of COVID-19, the effects of government policies to alleviate liquidity problems in SMEs and to support families under financial distress. It also depends upon how companies react and prepare for the re-start of economic activities. And, above all, it depends on how long the current lockdowns will last.
The country is facing an extra ordinary challenging time in this financial year. India has to urgently find a way to cushion the demand side shocks induced by potential lockdowns and other ongoing containment measure.
Developing countries like India has more fragile economic and social fabric and the present situation will create more suffering for the unorganizedsectors and migrant labour. Borrowing the words of former RBI governor C Rangarajan “Government of India must provide lifelines to businesses - extend loans and tax waivers to small businesses and the self-employed to retain staff -- give direct support to severely affected industries and provide more funds to states, tax waivers to households etc.”
Hie Mate ✌️
❥ tσpíc : ᴍʏ ᴠɪᴇᴡs ᴏɴ ᴛʜᴇ ᴄᴏᴠɪᴅ ʀᴇʟɪᴇғ ᴘᴀᴄᴋᴀɢᴇ ғᴏʀ ɪɴᴅɪᴀɴ ᴇᴄᴏɴᴏᴍʏ...
In response to the biggest economic crisis since 1979 triggered by the Covid-19 pandemic and the subsequent 54-day lockdown – one of the harshest in the world, the Central government’s fiscal relief so far is limited to just about 1.1% of GDP. It has, however, allowed states to increase their borrowing limit unconditionally by 0.5% of their Gross State Domestic Product (GSDP) or Rs 1.07 lakh crore.
A chunk of the Centre’s fiscal relief – Rs 40,000 crore or 0.2 per cent of GDP – has come as additional allocation to MGNREGA over and above the Budget Estimate of Rs 61,500 crore in the fifth and final tranche of the Atmanirbhar package announced by Finance Minister Nirmala Sitharaman on Sunday.
Much of the May 12 Atmanirbhar package of Prime Minister Narendra Modi totaling Rs 20 lakh crore and elaborated over the last five days by Sitharaman has been liquidity driven, with little burden on the exchequer. The government also took this opportunity to re-package some of the old measures, and push some new reforms such as in agriculture, public sector enterprises, which has been pending for long.
The money that the poor got in their hands over the last two months following the Central government announcements has been just Rs 33,176 crore so far, Finance Minister Sitharaman said. This includes Rs 10,025 crore to women Jan Dhan account holders, Rs 16,394 crore to
The farmers under PM Kisan Yojana (frontloading of payment without additional fiscal cost), Rs 2,807 crore to old persons, widows and the disabled, and Rs 3,950 crore to construction workers (also without any fiscal outgo since it is paid from the Building and Construction Workers’ Cess Welfare Fund).