Our present and future hang in a delicate balance, amidst the continually evolving COVID-19 pandemic. And, what’s worse is the vaccine against this virus is at least a year away from even the most privileged members of society.
Strict coronavirus lockdowns are in place across the globe to tackle the pandemic. The Indian government, too, imposed a lockdown in late March, which is still in place. Businesses across the country are closed for more than two months now, and those in the process of reopening will take a long time to get back in shape financially. Amidst strict lockdowns and crumbling markets, the coronavirus’ impact on the economy cannot be negated.
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COVID-19 and the Indian Economy
Unfortunately for India, the economy was already in splits since demonetization in 2016. To make matters worse, this virus entered our borders, imposing a countrywide coronavirus lockdown. Today, finances of both big and small businesses are somewhat in shambles, and it is impossible to predict the extent of the financial downturn.
The GDP is expected to fall much below 4%, a record low for a country of 1.3 billion people. Such a sharp decline in revenues and GDP is the reason why COVID-19 in India will most likely be our worst financial crisis to date.
Sectors like export and tourism took the worst hit due to the sudden spike of COVID-19 in India. Cities and states that relied chiefly on tourism and hospitality saw people losing jobs at an alarming rate. According to a McKinsey report published in March, bankruptcies and corporate layoffs will be disturbingly high this year. The demand for consumer goods will continue to reduce as people will further cut down spending. The only sector expected to stay afloat amidst the coronavirus in India is the financial sector, since substantial capitalization, and regulations govern India’s financial institutions.
Additional Read – Finance Ministry Measures to tackle COVID-19 Economic Slowdown in India
How Will the Crashing Economy Affect You?
Complex economic projections and disheartening news are probably bombarding your senses round the clock. With several coronavirus lockdown solutions being designed by the government and the lockdown being slowly lifted, you must understand what these projections, data, and news mean for you.
- Telecommunication and internet have allowed many businesses to operate remotely. You might have also spent the majority of the lockdown working from home. Prepare to do so in the near future as well. Even if authorities relax the lockdowns, businesses won’t be able to start in-office operations immediately.
- You should expect a significant decline in revenue if you own a business in tourism, hospitality, or exports sectors. There can be no accurate projections of when your business will revive. MSME’s might see slight stabilization in revenue, but loans and managing costs will trouble small business owners in the upcoming months.
- Supply lines of pharmaceutical products and medical devices will improve, and their demand might increase.
- Stock markets will continue plummeting as investments reduce. Loans, if made cheaper, will save several sectors like real estate.
As the government introduces more coronavirus lockdown solutions to revive the economy, most of you can hold your breath and hope for the best. The coronavirus in India has induced panic and uncertainty, but it will not last forever. With new fiscal policies, patience, strength, and trust, the world economy will soon gain a firm footing and begin to normalize. Until then, stay at home, maintain hygiene, and be patient.