HOW IS COVID-19 AFFECTING INDIA?
The economic effect of the coronavirus pandemic of 2020 was primarily negative in India. According to the Ministry of Statistics, India ‘s growth fell to 3.1 per cent in the fourth quarter of fiscal year 2020. The Indian government’s chief economic advisor said this decline is mainly due to the pandemic coronavirus effect on the Indian economy. Notably India was already undergoing a pre-pandemic slowdown and the current pandemic has “magnified pre-existing threats to India’s economic outlook” according to the World Bank.
Previously, the World Bank and rating agencies had updated India’s FY2021 growth with the lowest estimates that India has seen in three decades following India’s economic liberalization in the 1990s. Nevertheless, after the economic package was revealed in mid-May, India’s GDP projections were further downgraded to negative levels, signalling a severe recession. (During this time, the ratings of over 30 countries were downgraded.) On 26 May, CRISIL declared that this will likely be India’s worst recession since independence. State Bank of India research estimates a decrease in GDP in Q1 FY21 by over 40 per cent.
Unemployment grew from 6.7 per cent on March 15 to 26 per cent on April 19 and then down to mid-June pre-lockdown rates. An estimated 14 crore (140 million) people lost their jobs during the lockdown, while many others saw wages cut. More than 45 percent of households across the nation reported a drop in income compared to the year before. The Indian economy was projected to lose more than $4.5 billion (32,000 crore) per day during the first 21 days of full lockout announced after the coronavirus outbreak. Less than a quarter of India’s $2.8 trillion economic movement functioned under complete lockdown. This was estimated that up to 53 per cent of the country ‘s companies would be greatly impacted. With the lockout controls in effect, production chains were placed under stress; originally, there was a lack of consistency in streamlining what is a “key” and what isn’t. Many that were at the greatest risk in the unregulated markets and hourly pay classes. A significant number of farmers across the world have encountered confusion while rising perishables.
Larsen & Toubro, Bharat Forge, UltraTech Cement, Grasim Industries, Aditya Birla Group, BHEL and Tata Motors, major companies in India, have temporarily suspended or significantly reduced operations. Many young companies were affected when funding fell. The country’s fast-moving consumer goods firms have significantly reduced operations and are focused on the essential. On 23 March 2020, Indian financial markets reported their worst losses in memory. However, one day after the Prime Minister declared a full 21-day lockout, SENSEX and NIFTY reported their biggest gains in 11 years, on March 25.
India’s government has proposed a range of steps to resolve the crisis, ranging from food protection and extra funds for hospitals and for states to sector-related benefits and extensions of the tax deadline. A host of economic relief initiatives for the poor were reported on 26 March, amounting to more than ₹170,000 crore (US$ 24 billion). The next day, the Indian Reserve Bank also revealed a series of steps that would render access to the financial sector of the nation some ₹374,000 crore (US$ 52 billion). The World Bank and Asian Development Bank also accepted India’s demand for funding to combat the coronavirus pandemic.
As of July 10, 2020, Coronavirus has hit Gujarat hard, as it crosses 40,000 mark making a total of 40,069 confirmed cases, out of which 9900 are active cases, 28,147 patients have recovered so far, while the death toll reaches 2022. Ahmedabad, Rajkot and Vadodara are the worst hit cities of Gujarat where Ahmedabad stands at top with 22,745 confirmed cases, Rajkot stands second with 7307 confirmed cases, while Vadodara stands third with 2922 confirmed cases.
Vadodara stands at third position with a total of 2922 confirmed cases, out of which 765 are active cases keeping the patient recovery rate high with 2100 patients fully recovered from Corona while the city has registered a death toll of 57 infected people.