The formal workforce fared comparatively better as they could hold down their jobs

since companies across the board switched to ‘Work from Home’ mode of
operation. Video-conferencing platforms saw a boost as they were used by
companies and educational institutes to maintain continuity in their work. E-learning
received a major boost in lockdown as people began taking online courses to upskill
themselves among layoffs and pay cuts across various sectors.

The lockdown also disrupted the supply chain in the country to a large extent.
Various states imposed complex rules and regulations to restrict the movement of
vehicles in and out of the state. This affected businesses significantly as they
struggled to get raw material, operate factories without workers and transport their
product to the market. The lockdown also set off a crash in the Indian stock market
in March, as the grim picture about the long-term nature of the struggle with the
pandemic began to emerge.

The Government intervened to arrest the decline of the economy post its
announcement of the national lockdown. Honourable Prime Minister of India
announced a 20 lakh crore rupees stimulus package to revive the economy, which
target 5 key sectors which were the most affected: Business (especially MSMEs),
Poor (including migrants and farmers), Agriculture, Growth horizons and
Government reforms and enablers. The package which was nearly 10% of India’s
GDP stood out in terms of its scale and focused approach. It was lauded for making
it easier for making the MSME sector, which is the backbone of Indian economy, to
borrow and invest. It also increased funding for MGNREGA scheme, which aims at
providing livelihood to rural India. In order to facilitate the movement of labour, many
states eased their labour laws, which had not been modified for a long time.
Although it has had an overall positive impact on the economy, the stimulus package
was criticised for ignoring the demand-side boost and direct expenditure as it
contained largely of supply side measures and credit guarantees, in a time when
banks are stricken with the Twin Balance Sheet problem already.