Impact of COVID on Economy

The Corona-virus pandemic is an ongoing pandemic. The WHO declared the outbreak to be a Public Health Emergency on 30 January 2020 and recognized it as a pandemic on 11 March 2020. This COVID pandemic has caused disruption globally in both socially and economically. Few countries are fearing for the recession. Apart from the tragic human consequences of the COVID-19 corona-virus epidemic, the economic uncertainty has sparked the global economy. When the entire world is suffering from this COVID pandemic, India  is also part of this pandemic. COVID has impacted to the entire India economy . A few of the consequences are as :

a.In India most of the businesses have specified a certain amount of impact of shutdowns caused due to COVID-19 on operations  

b.According to the “Centre for Monitoring Indian Economy”, Unemployment rate had increased nearly 19% within a month, reaching 26% unemployment across India.

c.Most of the households across the nation have reported an income drop as compared to the previous year.

d.A number of young startups have been impacted as funding has fallen.

e.During this lock down almost all the sectors have taken a downturn . Pharma sector is doing better as compared to other sector.

This COVID has impacted all sectors such as Hotel Industry, Transportation, Logistics, Manufacturing , Construction.Auto, Tourism , Metals, Drugs, Chemicals, Pharmaceuticals, Electronic goods which we will discuss herewith .

  1. Sensex and Nifty

In India the growth of the markets are monitored by BSE Sensex and NSE Nifty by the share holders. Starting from 2nd March 2020, the market witnessed a crash, when the Govt declared the COVID cases. Also as per the International bodies, India suffered a major trade impact due to this outbreak. Not only India, almost all the countries are affected economically by this COVID. On March 12, when the WHO declared the COVID outbreak as a pandemic, the Indian stock market crashed . The BSE Sensex dropped at 8.18 percent and Nifty dropped at 9%

2.Agriculture

Due to this lock down Tea estates were unable to harvest the flush. This will impact to huge losses in this sector. Also at the same time entire Agriculture industry faces a huge loss due to lock down and due to unavailability of Supply Chain . Farmers are not able to cultivate and unable to sale those fruits and vegetables properly due to lack of supply chain facilities.

3.Manufacturing

Most of the manufacturing industry have temporarily suspended or significantly reduced operations in a number of manufacturing facilities and factories across the country.

4.Education Sector

All the schools and colleges, educational institutes are declared a lock down. During this time all the examinations are postponed . Also all the institutions are given guidelines for the same.

5. Commercial establishments

During this COVID-19 pandemic, all the commercial establishments are remained close . Few of the Organizations are working from home for their core activities. However establishments who provides essential service as defined by the Govt. are open.

6.Road

All the Public Transports including Buses, Mini buses, Cab ,Auto Rickshaws and Tempos, Ola, Uber are cancelled. So the person depends on this Road Transport business are facing difficulties to run their business.

7.Railways

Indian Railways cancelled all its train due to this Pandemic across the country. Also All the Metro and Local trains are cancelled. 

8.Flights, Aviation and Tourism

All the Domestic and International Flights were suspended. Aviation and Tourism sectors are directly impacted economically. Some of the Organization in these Aviation and Tourism sector are near to collapse, since all the domestic and international travel were banned by most of the countries.

9.Fast moving consumer goods (FMCG)

Due to this lock-down,  the demand and consumption of FMCG and household products increased massively as these are fall under essential services. and companies had to increase production. The production of essential goods such as food, groceries, and staples, health and hygiene products including soaps, detergents, hand washes and sanitizers, etc. are increased .

However due to the restriction on transport there is a gap in production and supply of these FMCG items to the wholesalers, Retailer and end consumers. So restriction on Supply Chain has lead to decrease in production of these FMCG products.

10.Auto Sector

Since last few, years Indian Auto sectors have taken a big downturn. At the same time Indian Auto Sector imports most of the auto components from China and mostly from Wuhan. As this COVID-19 originated from Wuhan, which is a Auto Hub, there is a direct impact on the import of these items to India. The import dependency is higher in the two wheeler segment as compared to four wheeler segment.

11.Hotels and restaurants

Due to this COVID 19 Pandemic, most of the Hotel, restaurants have suspended their business.

12.Hospitality Sector

Due to this COVID-19 Pandemic all the meetings, workshop, parties, get together,  social meeting, family holidays, outing by the corporate and Educational Institute, business meeting, business stays, leisure days  are being completely shut down. In such a scenario the hospitality sector is taking a hard hit. Due to this all the Guest house business, Town Hall, Marriage Hall, Town house, Banquet halls etc. business are completely closed.

13.Entertainment

All the production of films, TV shows and web-series are stopped . Cinema halls across countries are closed. Also all the Award show, Reality shows are stopped .

14.Events

The Padma Awards ceremony that was scheduled to be held on 3 April was postponed. Spectators are not allowed to see the Wagah-Attari border ceremony. All the social, political, cultural, religious events are cancelled.

15.Travel and tourism

Due to this COVID 19 pandemic, travel and tourism sector have taken a downturns . All the National Monuments including the Taj-Mahal ( Seven Wonders of World) , Red Fort and Qutub Minar are remained closed. The Museums under the Archaeological Department of India are remain close. In Gujarat the Statue of Unity will be remained closed  for the people.

16.Religious Places

Most of the Hindu Temples are remained closed for the visitors . Some of the major temples including Mumbai’s Siddhivinayak Temple, Rameswaram Ramanathan Swamy Temple in Tamil Nadu, Jagannath Temple in Puri, Mata Vaishno Devi in Jammu and Kashmir, Ganges Ghat in Varanasi, Ganga Aarti, Venkateswara Temple, Tirumala in Andhra Pradesh, Gandhi Ashram in Ahmedabad, Amarnath Yatra in Jammu & Kashmir are closed for the visitors.

The Mecca Masjid of Hyderabad was closed .

Most of the Christian churches suspended in-person mass and have offered worship for their congregants through livestreaming, radio and television.

17.Sports

The 2020 ISSF World Cup in New Delhi, was postponed. The Indian Open badminton tournament in New Delhi was suspended. India’s FIFA World Cup qualification match  against Qatar in Bhubaneswar was postponed. The All India Football Federation suspended all matches of I-League . IPL by BCCI is suspended the tournament indefinitely, Cricket ODI matches between India and South Africa  was cancelled .

18.Exodus of migrant workers

During this COVID pandemic lock-down, factories and work places other than Essentials services providers are closed. So all the workers from these closed factories and work places were left with no work and no income. So to avoid any difficulties migrant workers were seen to back to their home by walking along with their children and family. Even though some state Govt have helped these workers to commute to their home. Also most of the state Govt and NGOs , and Kind people were seen who provides daily food to the persons / family who are in need of.  

19.E-commerce

Due to the lock down e-Commerce Industry has taken a bug downturn. For example- Amazon, Flipkart, Bigbasket, etc. Even though they were allowed to provide the service for essential services, due to unavailability of supply chain this e-Commerce industry facing in service.

20.Food security

The lockdown has disrupted food supplies and threatens to trigger a food crisis.

21.Spa and Saloon

Due to this lock down, entire Spa and Saloon industry have closed their business.

22. Building and construction

Due to this lock down entire building and Construction industry have suspended their work.

23.Banking, NBFCs, Insurance

Due to this pandemic, entire growth of the businesses are down . Some businesses are nearing to rescission. Due to increase in unemployment, due to salary cut businesses are not be able to make any repayment of loan, bank customers will not be able to pay the EMI. People will not be able to pay the Insurance premium.

24.At the same time all the sector which are depends for import and export have taken a big downturn . For Example India depends on imports from China for almost half of its consumer durable built units . Because of the lock-down, most of the inventory are piled up at warehouse . So the business needs to re engineer the process for these stock clearance. This Consumer durables and electronics sectors have taken a downturn.  The situation is extremely unpredictable with respect to this sector and is expected to take close to a year to show any signs of growth

To avoid this situation companies will be forced to

  • Re-engineer their business process,
  • Restructure the work force,
  • Re-organize the pay structure of employee.
  • Cutting salaries and
  • Laying off employees.

To avoid this pandemic, there is no other way except social distancing. Also Govt needs to introduce economy stimulus package time to time. Without the public support, it will be difficult to overcome this pandemic.  Govt of India and all state Govt are taking necessary steps to keep the things under control. Doctors, Police, Hospital Staffs are working 24*7 to overcome this pandemic. I am sure things will be better in few days.  We will win .

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