Is the Indian economy facing a huge decline due to COVID-19?
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Call it a man-made disaster or an unfortunate one, the COVID-19 outbreak has made the country’s economy especially healthcare unstable, since its arrival. Just now industry experts have deduced that the baseline forecast showcases the decline in global GDP in 2020 envisions a 5.2 percent contraction. If the global GDP is going down the line of a befalling recession, just think of how much of a loss a country such as India is facing when already it was going through a challenging state of its economy. However may it be, the domestic economy is marked to decline when the global economy is on its descending steps?
A country’s economy is said to be on a smooth and right path when the private consumption and the government’s expenditure runs hand in hand. Any ups and downs bring a series of issues starting from the healthcare sector being affected and the fall of business disruptions.
Moreover, it has been extracted by the experts that India’s economic growth is likely to decline by 2 percentage points in the next financial year due to the impact of the coronavirus pandemic.
Coping up with the impact of COVID-19
Due to a substantial decline in the employment rate and a halt in the supply chain services, the decrease in the cash flow was excessive in major sectors leading up to a difficult scenario for the people as well as the government to stand up to.
According to the Business Standard, the unemployment rate may face a steep blow and as many as 6.1 million young people (15-24 years) may lose jobs in India till the end of 2020.
Even though there is a high rate of unemployment, the government of India is looking for solutions and have initiated their project by extending its flagship jobs program (MGNREGA) in villages and has also been providing offers to the workers in cities who were left unemployed by the pandemic-induced lockdowns, said a government official. The program initially costs INR 3500 crores ($4.8 billion) and when approved will move forward to small cities, said Sanjay Kumar, a joint secretary in the Ministry of Housing and Urban Affairs.
These measures are as important as they are quick to rebound the economic state of the country as with the coronavirus spreading faster in India than anywhere in the world, the Indian government on Monday announced the country's biggest economic contraction in 24 years. All measures and steps taken to resume the normalcy are to be taken at a quick pace for only then can the rebound be better and fast. To overcome this crisis of a pandemic, Reuters has reported that Russia will supply India's Dr. Reddy Labs with 10 crores (100 million) doses of its Sputnik-V COVID-19 vaccine, once the vaccine gets regulatory approval in India.
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Gaining the pre-COVID-19 level
Even though India is now the second-worst affected country in the world by COVID-19, post lockdown imposed in March and mid-May has recovered at quite some lengths after the month of June.
As per NomuraIndia Business Resumption Index economic activity fell from 82.9 on 22 March to 44.7 on 26 April and by 13 September 2020, the economic activity was nearly back to pre-lockdown levels.
Not just this, the unemployment rose from 6.7% on 15 March to 26% on 19 April and then back down to pre-lockdown levels by mid-June.
Moreover, the recovery rate has a lot to do with the unlocking phases adopted by the country, slowly and steadily many businesses have started their operation back to normal and as per the professional network industries and experts, it might be back on track with a strong line of economic recovery than it is anticipated. Also, on 24 July the Finance Secretary of India stated the economy to be showing signs of recovery at a faster rate than predicted, while the Economic Affairs Secretary said that he expects a v-shaped recovery for India.
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