COVID-19 Pandemic Effect On Indian Economy

IMF chief Kristalina Georgieva states that the COVID-19 pandemic can unleash the worst recession ever since the Great depressions of 1929-30. Her thoughts are not unfounded off. Year 2020 started in the most surreal manner, anyone can think of. It started with the US-China trade war, then came the US-Iran fiasco and the latest is the deadliest entrant in the form of novel Coronavirus, COVID-19, which eventually engulfed all the prominent countries and paused everything.

India reported its first Corona positive case on 30th January 2020. Today, the numbers have been on an upward trajectory as it has reached above seven thousand. It is the result of combined efforts from the government and civil societies that are helping in managing the outbreak. Moksh Popli believes that the efforts are minuscule in front of the scale of the pandemic. The condition of the economy has been on downslide ever-since the outbreak occurred. It seems that “Blood-bath” on Dalal street has become the order of the day.

The consequences of the COVID-19 outbreak are visible on the economy with nearly all sectors desisting in the red. Manufacturing, IT services, Automobiles, Banking sector, and others are staggering due to the lockdown following the outbreak. The automobile and banking sector had already been stressed after the NBFC crisis and Yes bank crisis. Moksh Popli, being an avid business consultant based in New York says that this disruption can prove to be the final blow to the economy under stagflation.

The stretch to lockdown and emphasis on social distancing has severely damaged the economy. It remains to be seen, how long the MNC’s can sustain their humongous bench strength without deduction. For the informal sector, it has been paralyzed to an obstinate end. There has been an approximately three-fold rise in the unemployment rate following the closure of the industries and SEZ. The labor and low-income class have been left to feed for themselves and their families backed by their insufficient savings. Meanwhile, the state and the central government are constantly bringing policies to help the stranded at a big scale. But the measures are inadequate in front of the affliction. 

The government sensing the urgency of the degrading situation has announced an economic stimulus package costing $ 1.7 trillion. The aid aims at catering to the LIG (low-income groups), food assistance programs, support to the farmers, health insurance for medical staff, etc. The reserve bank has slashed its repo rates in the last hour's effort to manage the economic decline. Economists are susceptible to the intended effects, given the dampened economic sentiments and lack-luster growth prospects.

Moksh is concerned about the current financial condition in the world. He is sure of an efficient and positive recovery since the fundamentals of our economy are strong. Backed by the Government, the debt is expected to boost demands, and the economy would rebound in months, if not in days. Therefore, he advises the entrepreneurs to look at the current situation as a challenge rather than a catastrophe.  Calculatingly optimistic in his views, Moksh Popli considers these disruptions as an essential adjustment to higher growth trajectories. Contemporarily he remains amongst a handful of business geeks, who places an affirmative bet on the economic credentials of the country. The sign of hope by the Anti-Malarial drug and the continuous researches in combating the pandemic and resoluteness of the government can be the next silver lining on the economic horizon of the country.