Corona Impact on Indian Economy
Coronavirus adds to India’s slowdown, but is
there light at the end of the tunnel?
The coronavirus crisis is expected to pull the world into a recession. No country is insulated from its horrors. But, Is there any different Scenario for Indian businesses and consumers as they go through an extended lockdown?
The coronavirus pandemic occurred at a time when the world was already going through the trouble – rising crude prices, slowing economies, depreciating currencies, increasing trade tensions, loss of employment, work visas, and so on
The pandemic has led to massive supply chain inefficiencies, dipped consumer demand crashed global stock markets, paused economic and industrial activity, and brought about drastic changes in lifestyles and social behavior.
The coronavirus crisis is expected to pull the world into a recession. No country is insulated from its horrors. But, Is there any different Scenario for Indian businesses and consumers as they go through an extended lockdown?
The coronavirus pandemic occurred at a time when the world was already going through the trouble – rising crude prices, slowing economies, depreciating currencies, increasing trade tensions, loss of employment, work visas, and so on
The pandemic has led to massive supply chain inefficiencies, dipped consumer demand crashed global stock markets, paused economic and industrial activity, and brought about drastic changes in lifestyles and social behavior.
On
the other side in a short period of time due to a drastic reduction in fuel due to
lockdown, crude reduced to negative prices due to challenges of excess supply.
Farmers are also in a loss as due to lockdown perishable goods like vegetables,
fruit and flowers are wasted due to breaking in logistic and closure or limited
operations of the markets.
India,
which was already going through its longest fall of GDP decline in almost three
decades. The nationwide lockdown is estimated to have wiped off Rs 7-8
lakh crore from the Indian economy, according to Centrum Research. If lockdown
even partially extended further, economic crises will only multiply.
The
World Bank estimates that India's GDP growth rate will fall to 1.5 percent to
2.8 percent in the current fiscal (FY21). That would lead to the slowest GDP
growth rate since economic liberalization in 1991.
The three major contributors to India’s GDP — domestic consumption, investment, and external trade — have all been severely impacted by COVID-2019. Analysts believe that a “severe demand shock” is underway, particularly across discretionary/luxury spending.
The three major contributors to India’s GDP — domestic consumption, investment, and external trade — have all been severely impacted by COVID-2019. Analysts believe that a “severe demand shock” is underway, particularly across discretionary/luxury spending.
Arun M Kumar, Chairman, and CEO, KPMG India elaborates, “Among the most striking consequences of this pandemic have been the game-changing impact on our social behavior, as well as on legacy networks and patterns of economic activity. Speed, agility, and innovation are required from governments, businesses, and society in crafting responses to cope with this evolving new normal.”
But overall as a country India, we will have a new door of opportunity in this global crisis. As a citizen, corporate, Entrepreneur, or a bureaucrat, we have to grab the opportunity of growth engine and a complete transformation of what we were doing till now.
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