I read this somewhere, “It is the worse economic impact after WW2.”
Economic Times Says:
India can increase it’s exports because China’s exports are down. India can try to fill that demand.
Business Line Says:
Trade impact on India will be 348 million USD, lower than US, Japan, Korea or EU. Sector-wise distribution is as follows:
- Chemicals sector – 129 million USD
- Textiles and apparel – 64 million USD
- Automotive sector – 34 million USD
- Electrical machinery – 12 million USD
- Leather products – 13 million USD
- Metal products – 27 million USD
- Wood products and furniture – 15 million USD
UN Conferences on Trade and Development says:
- Hospitality – 35% fall has been reported in restaurant business.
- Apparel – 35% of apparel export orders that come from Europe will be affected.
- Consumer Durables and Electronics – 15% decline has been seen in mobile shipments between January and March.
- Poultry and Seafood – 30% fall has been reported in demand for chicken in the past three weeks.
According to Business today, COVID-19 lockdown willl cost India, somewhere around 8.76 lakh crores.
And this is my opinion that I am giving after analyzing the situation to the best of my ability.
It is a great time to learn for students and working professionals.
Startups solving issues that have arisen from COVID-19 will benefit greatly. For example, a lab in pune called Mylab has developed an affordable Coronavirus test kit.
People obviously won’t get hit equally.
India’s GDP Growth Rate was estimated to increase to 5.3 to 6% by different agencies. But I believe it may remain down at 4-4.5%, which is still better as compared to other countries.
Restaurants and Hotel business will be hit and small ones may get closed if they don’t have financial cushion. Big ones will survive due to monetary and investor backing.
Tourism will be hit too but it will resume in a few months and it will be good to go. Businesses that depend on tourism will be hit, but most of them will recover.
Most airlines will survive but the airlines with bad financials may get sold to bigger players in the industry.
Manufacturing will be down because the demand will be down for most products, except essential products.
Poultry has been affected so badly due to rumours and myths such as, “COVID-19 can spread from poultry”. But the truth is that it can’t spread from poultry. It’s not Bird Flu.
India may not suffer much on the exports front, because exports of services and goods are only 1/5th of the total economy. Lower oil prices will provide a cushion, boosting government revenue and creating space in household budgets.
Most affected will be Micro, Small and Medium Enterprises (MSME) because they generally don’t have great financial backing, business continuity plans or monetary cushions. Big enterprises will survive.
Raw material exports from China were down. So, it will also hamper Indian businesses that depend on raw material coming from China.
There are some sectors that haven’t been affected by this slowdown yet. They are Telecom, Heathcare and Insurance.
The people who will be most affected are from unorganised sectors. Migrant workers, daily wage labourers, domestic help, all these people will be affected worsely due to loss of jobs and livelihood. Though, government is taking steps for that, efficiency of those systems is a topic of worry and discussion.
People in rural areas, who work in Dairy and Agriculture, may not get hit. It is because of the fact that these industries are producing essential goods.
India may not get hit by the recession. Infact, almost all developing economies won’t get hit by the recession. Though, economic slowdown that our country was recovering from, may go on for much longer now.Karan Phougat