We heartily welcomed new year-2020.Unfortunately a deadly virus entered our country along with New Year. Ofcourse India is not the only country that is feeling the brunt of this virus, whole world is feeling the brunt of this virus. We nicknamed this virus as Covid-19.Primarily this virus broke out in China and later it had spread to other countries of the world. This virus outbreak literally dismantled the economy of the world. There are many important factors that contribute to exchequer of the world. One of the important factors that contribute to the world economy is international trade. Because of this virus outbreak, international trade has weakened. On the whole, the economy of the world shackled to a great extent.
Let us try to know the impact of this virus outbreak
{Covid-19} and consequent lockdown {in some countries} on the economy taking India as an example. Knowing the impact of this virus outbreak on the Indian economy, we can get to know the impact on the economy of the world.
Now let us examine the economy of India. Taking various statistics given by various financial institutions into account, India is the fifth largest economy by nominal GDP and it is the third largest economy by purchasing power parity (PPP).India’s growth rate decreased significantly after the outbreak of this deadly virus. Global financial institutions like the IMF and the World Bank lowered their growth estimates by 0.5% – 1.5%.With this virus outbreak and consequent lockdown India slashed its growth to 1.9%.If we take these estimates into consideration, we can get to know the position of Indian economy.

To know better let us examine deeper,

PRIMARY SECTOR:
Major workforce of our country is concentrated in the primary sector. Most of the workforce who depend on this sector are for their livelihood. Primary sector includes fisheries, livestock and farming. So this virus outbreak and consequent lockdown will have a significant impact on the livelihood of the farmers. To curb the virus spread in our country, the PM Of our country declared a 21- day lockdown on 23 march, 2020.This lockdown made transportation unavailable for the farmers who are ready to take their output to markets. This lockdown also decreased the prices for their products leaving them helpless. Farmers who cultivated horticultural crops suffered the loss more than farmers who cultivated grains. Daily wage labourers who also come under primary sector are the worst sufferers. This lockdown is now extended two times to curb the virus spread. This extended lockdown may show bad impact on the contribution of this sector to the GDP of the country. Ofcourse this lockdown is for the health of the people, but this is affecting the livelihood of the major workforce of country.

SECONDARY SECTOR:
Secondary sector is the second largest contributor to the GDP of our country. Now it is hit hard because of the outbreak of Corona virus and its consequent lockdown. Industries are shut because of the declaration of lockdown to curb the virus spread. As industries shut, unemployment rate reached its zenith. People who are employed in this sector are unable to earn their livelihood. One of the major industries that is affected is Automobiles industry. According to some experts, Automobiles industry had been trying to overcome myriad challenges already, now, the outbreak of Covid-19 is no less than a curse. However, the impact of Covid-19 on the secondary sector is considerable and it is a major loss as industries are shut.

TERTIARY SECTOR:
Tertiary sector is the largest employer of our country and also the largest contributor to the GDP of our country. Covid-19 has its worst impact on service sector. One of the important services that is badly affected is aviation services. Because of the outbreak of this deadly Corona virus, both domestic and international flights are cancelled. Because of the lockdown IT services are done through online, i.e. these jobs are done staying at home {work from home}. Working from home decreases the efficiency and they should work amid many disturbances. Because of this virus outbreak the contribution of this sector to the GDP has come down.
According to Deloitte report, the impact of covid-19 on the Indian economy is through the following four vectors:
Supply disruptions
Global and domestic demand
Stress on banking and financial sectors and parameters
Falling oil prices

Today’s world is different from the world that existed before 1990s.Liberaisation reforms were introduced in 1991.After the world is liberalised, trade among the countries became easier the world became interconnected after the liberalisation process. This interconnectedness pushed the world into dependency. Due to the outbreak of Corona Virus, supply chains are disrupted and major industries of many countries are affected. Likewise, Indian industries are affected because of supply disruptions. This happened as the world is interconnected.
Global and Domestic demand is another important vector to which the impact on Indian economy can be felt. Due to the outbreak of Covid-19 and consequent lockdown, there is no income to the people. As there is no income to people, consumer spending is reduced. Because of reduced consumer spending, global and domestic demand is reduced. A decrease in demand is always bad for an economy.

Health of banks and financial institutions is necessary for the sustenance of an economy. During this period, stress on banks and financial sectors is more. Lockdown made banks to be exposed to stressed industries and Micro Small and Medium Enterprises {MSMEs}. Banks are also stressed because of rising consumer loan default caused by high unemployment rate. This stress on banks impact credit growth. Another situation that can be witnessed during this period is sharp depreciation of rupee against dollar. Depreciation of rupee against dollar worsens trade deficit, which is bad for our economy. Non-Performing Assets {NPAs} may rise as people are unable to work and earn income amid lockdown. Sensex also decreased by 30% after the outbreak of this deadly virus.

Falling oil prices is another vector through which the impact of covid-19 on the Indian economy can be known. Falling oil prices controls inflation. Controlling inflation is very important at this juncture. Falling oil prices also decreases the Current Account Deficit [CAD], which is good for the economy. So we can say that falling oil prices has a positive impact on the Indian economy.

In brief, the five worst hit sectors because of the outbreak of covid-19 and its consequent lockdown are:
1. Aviation
2. Retail
3. Financials
4. Real Estate
5. Automobiles

Tourism is another important sector that is affected because of this virus outbreak. In reality tourism contributes to a great extent to the revenue of our country. So this virus outbreak incurs a huge lose to our country’s revenue.

However, lockdown which is a consequence of virus outbreak improved the environmental conditions in our country. It reduced the pollution levels in our country. Our government initiated a programme called NAMAME GANGA to clean the Ganga River and invested huge amounts in this programme. But now the river cleaned itself. This lockdown also helped ozone to heal itself.it also gave a break to the busy schedule of people and gave them time to spend with their families.

Whatever might be the good things that happened because of lockdown, these good things doesn’t match to the losses that are incurred because of this virus outbreak and its consequent lockdown. The economy is hit hard, India slashed its growth rate to 1.9%which is a 29-year low after 1.1%growth rate recorded in 1991{LPG reforms}. With this we can understand the position of our economy right now.

So this experience should kept in mind and prepare ourselves so as to overcome these type of pandemic situations. The outbreak of Covid-19 becomes a great lesson to all of us.

IT DOESN’T MATTER WHETHER A COUNTRY IS DEVELOPING OR DEVELOPED, BOTH SHOULD TACKLE THIS PANDEMIC IN THE SAME MANNER.VIRUS DOESN’T CHOOSE ONLY DEVELOPING OR UNDERDEVELOPED COUNTRIES AND ATTACK THEM.

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