The effects of covid-19 on the Indian economy
Explained: How did covid-19 impact the Indian economy
Given the rapid spread of Coronavirus, the whole world is facing its effects. Covid-19 has been declared Pandemic for 10 months. We still await the world to plant Corona Vaccine and it is remaining to see how effective they are in changing the status quo, as well as Indian Economy has been seriously affected. The epidemic effect has been affected on people and businesses. There have been destructive results for some businesses. I hope everything will be completely fine in the coming months in the country. However, it’s necessary to understand what happened in the last few months, so that we can find the right solution to challenges.
Service sector affected by cross-contesting free movement
Since the spread of the Corona Virus, state governments imposed lockdown and it led to a free-movement. Its biggest impact has been on the service area. It has increased unemployment as people were not able to travel to their work area through public transport. Moreover, a huge portion of employment in India works in unorganised sector, due to lockdown the lack of work forced migrant labourers to return their village-city i.e. home town. Tourism, retail and hospitality areas have had adverse effects. The good thing was that Unlock improved the situation and brought the demand back to a considerable extent. According to the Confederation of All India Traders (CAIT), demand in Diwali season was seen rise by 10.8% and market has remained a sharp stance.
Develop Work from Hole Cultural
Other issues speak of structural changes that companies had to do in their operations. This outbreak led to ‘work from home’ and ‘work from any where’ methods of working which led to a change in social distance norms. This was unthinkable before Covid-19, as people had to report physically to work. This was positive for both organisations and employees as it has allowed companies to reduce their fix overheads, while this helped employees save time. Employees were also able to save costs as they are living in their hometown now. On the other hand, companies are reducing spending on real estate and other overheads. They are now actively hiring from Tier-3 and Tier-4 cities, because employees don’t need to relock
Innovation in the Health and Pharma region too
The situation in health sector isCovid-19 also similar. Stock prices were seen increase in health and pharma areas as companies were able to gain large amounts of sales. Pharma and Health Tech companies are using digital space more and more as customers are using the mobile app to consult doctors for their medicines and health plans during the current health crisis. Industry was at the speed of development before the virus spread. Covid-19 has accelerated development further
COVID-19 and its impact on the Indian economy
With the COVID-19 cases being dangerously over 200,000 and the number of dead worldwide being over 8,000, the World Health Organisation (WHO) declared the virus outbreak as the pandemic in the second week of March 2020, four months after the novel virus virus. First headlines.
Around 162 countries are going to lockdown continuously, and businesses around the world are working with fear of imminent collapse of global financial markets. This situation is, with a sluggish economic growth of last year, in a developing country like India, leading to highly volatile market conditions. Let’s understand how coronavirus is affecting trade and subsequent tax reforms in India.
With increasing unemployment, interest rates and fiscal deficit, the economy has seen better days in India. The work of ghee into this fire is doing a new corona virus which is shocking Indian business markets dependent on China for imports.
raw materials and spare parts
About 55% of electronics imported by India come from China. Due to the coronavirus outbreak and the later lockdown, these imports have already reduced to 40%. As a retaliation measure, India is considering promoting indigenous production to reduce dependence on the single market. Additionally, China is India’s third largest export partner for exporting raw goods such as organic chemicals, mineral fuel, cotton, etc.; and countries are likely to have sufficient trade deficit for India from ponds.
medicines
The impact of the pharmaceutical industry on the pharmaceutical industry is a significant concern for India, mainly because 70% of active pharmaceutical materials (API) are imported from China. These active pharmaceutical materials are required for a large number of pharmaceutical manufacturing companies in the country. As COVID-19 is rapidly making its penetration in India, the drug is going to become the number one in consumer demand, and because there are almost not enough API for the manufacture of drugs, so the prices in the later traders and the market are skyrocketing. Prices of vitamins and penicillin alone are already seen a 50% increase.
tourism
India is big in terms of cultural and historical tourism, attracting domestic and foreign nationals year-round. It is not surprising that a large number of COVID-19 cases confirmed in India include foreign tourists. But by suspending visa and closing tourist attractions indefinite, the entire tourism value series, which includes hotels, restaurants, attractions, agents and operators, are likely to be damaged by thousands of crore rupees. Experts believe the tourism industry is likely to suffer huge losses and it can crush the industry in the near future.
aviation
After suspending the tourist visa by the Government of India for an indefinite period, it is being said that airlines are working under pressure. Nearly 600 international flights from India were cancelled for different periods. Around 90 domestic flights have been cancelled, thereby declining airline rent on popular local routes too. Private airport operators have requested the government to allow minor passenger facility fees on air rent to cover increased operational costs.
