The outbreak of COVID-19 Pandemic in India during March 2020 brought unprecedented miseries to social and economic lives, which has badly impacted our GDP growth. Taking together Corona first wave which started during March 2020, and the Second wave which started during March 2021, the GDP has fallen drastically. Recent data shared by National Statics Organisation (NSO) India’s India’s GDP has grown 1.6 per cent in the fourth quarter of FY21 (Q4FY21) after growing 0.4 per cent in the December quarter. The full-year GDP for FY20-21 has also been revised to -7.3 per cent from -8 per cent, but surprisingly India received a record $81.7 billion in foreign direct investments (FDI) in fiscal 2020-21.
The Covid-19 has impacted on many sectors such as aviation, tourism, retail, capital markets, MSMEs, Informal Sector and oil, banks, hotels,real estate, education, health of people, IT, recreation, media and others. According to the recent report of Azim Premji University,Bengaluru, 23 Crore people have got their earning slipped down from Rs 375 a day, 34 lakhpeople have lost their jobs. In another report 8 Cr people have gone down below poverty line.
According to ASSOCHAM, Most Indian business/Industries are operating at limited capacity, owing to supply chain disruption and movement constraints. This is adding to their financial burden and making it difficult to pay interest and EMI against loans and salaries. Moreover, restrictions on the movement of people and goods have impacted workforce capacity, bringing economic activity to an almost stand-still. While most respondents don’t expect their industry to recover soon, they are also not confident of the effectiveness of measures to support their industry-specific challenges at the state level. The most burning challenges before Government were to save the lives of its people suffering from Covid-19. Globally, in a poll by the ‘Edelman Trust Barometer’, out of the 13,200+ people polled, 67% agreed that “The government’s highest priority should be saving as many lives as possible even if it means the economy will recover more slowly”; that is, life should come before livelihood. For India, the poll showed a ratio of 64% to 36%, where 64% of the people agreed that saving as many lives
as possible was a priority, and 36% agreed that saving jobs and restarting the economy was the priority. Therefore last Union Budget allocated Rs 67,112 crore ($9.2 billion) to the Union health ministry. Besides this, Rs 14,232 crore ($1.95 billion) was additionally allotted to the health ministry, according to the Union government’s supplementary budget. Additionally beginning April 2021 has set aside Rs 35,000 crore towards COVID vaccination programme. On 11 April, in a meeting with the Chief Minister’s of India, the Prime Minister said “Our mantra earlier was “jaan hai toh jahaan hai” but now it is “jaanbhi, jahaan bhi”
The area of economy worst hit is as such;1. Hospitality Sector; According to The World Travel and Tourism Council (WTTC), Indian tourism generated $194 bn or 6.8% of India’s GDP in 2019 and supported 39.80 millionjobs which is 8 % of its total employment.This sector has been hit hard by the restrictions and curfews imposed by states. Many of these businesses have been brought to a standstill as they are merely allowed to deliver food that qualifies as an essential service. In Hospitality sector alone 27% employees have lost their jobs. 2. Tourism Sector; the hospitality sector is interlinked to the all-important tourism sector. The tourism and travel sector that employs millions of Indians started bouncing back after the first wave, but little did they know that Covid would be back for the second round of devastation. The tourism sector, which contributes nearly 7 per cent of India’s annual GDP, comprises hotels, home stays, holiday homes, motels and more.3. Aviation Sector; Aviation and other travel sector establishments faced a massive struggle during the first wave of the pandemic. The situation during the second wave is slowly turning grim as restrictions continue to rise. It has been seen that air travel has seen a 50 per cent reduction over the past few months. The fact that people are scared to step out of their houses indicates that the larger travel sector is also taking a battering. While airlines were slowly starting to increase revenue margins, the deadlier wave of Covid-19 Second phase has made the situation worst again. According to one advisory by Govt, people were advised not undertake any journey abroad at least for a year more, that means recovery in this sector will be slow.4. Real Estate and Construction Sector; Thecontribution of the real estate sector to India’s gross domestic product (GDP) has been estimated around 6.5 to 7 per cent and the segment generates millions of jobs. The impact of Coronavirus on the Indian real estate sector was maximum and stifling to the point that it brought property transactions to a near-halt, last year when the nation went into a complete lockdown between March and June 2020. Since then, the market has taken several strides towards recovery, and just when it seemed the revival was not far, the country has been struck by yet another wave of the virus, this time, far more fatal. Experts say the recovery of the realty market in India could now prolong until 2022.5. Automobile Sector; the auto industry contributes 7.5 percent of India’s GDP and a whopping 49 percent of manufacturing GDP with a large economic multiplier impact. Automobile industry provides employment to 13 million people in the India work- class. Two wheelerssector in India is one of the world’s fastest growing passenger markets it is second largest two wheeler manufacturer and fifth largest commercial vehicle manufacturer. It is also home for the largest motor cycle manufacturer. This sector was badly hit as due to Lock down there was virtually no demand. Since automobiles are discretionary items, vehicles sales will largely depend on consumer sentiments. As per an ET Auto report, passenger vehicle sales in April 21are likely to see an 11 per cent drop. While auto companies are better prepared to deal with the crisis this time, it will become a challenge for them if the infections of Corona Virus second phase continue to rise beyond June-July2021
Amidst these challenges and hurdle where everyone is expecting Covid second phase will be over by July 21 end, the report publishes by State Bank of India on 1st June 2021, says the third wave of the novel corona virus disease (COVID-19) which is offing, could be as intense as the second wave and it could last for an average duration of 98 days.
Under the circumstances we have to wait some more time to recover the falling economy and we are surely going to defeat Corona Virus and regain our Glory, particularlymarch ahead towards achieving $5 Trillion economy by 2024.
- By Dr.R.D.Mishra
- Greater Noida Productivity Council , Frm Director & Head, National Productivity Council, GOI