IMPACT OF CORONA VIRUS ON

INDIA'S ECONOMY

India's GDP is currently estimated at around USD 2.8 trillion and the Narendra Modi-Led government set
a target of taking the economy to USD 5 trillion over the next five years. But, who knew that before even
starting towards the target whole country will be on a shutdown due to the outbreak of pandemic
COVID-19 the novel coronavirus. India is currently in the midst of a 21day lockdown that begun on
March 25 to control the spread of virus. The importance of social distancing and lockdown in limiting the
spread of virus cannot be stressed enough, but these measures have huge repercussions on livelihood
and the economy at large, which has already been seeing a slowdown over the past year.

In a very short Union Government would have to spend a lot of money, to enhance healthcare, to
fiscally empower the state in order to pull their weight in battling the virus and the economic
rehabilitation, to provide relief to the people and companies, and to kickstart massive investment over
new and ongoing projects. Such measures would be important to revive the economy that has a risk of
going into coma. On March 26, Finance Minister Mrs. Nirmala Sitharaman announced a $23 billion
package aimed at moderating the disruption. There are countless relief packages provided by
government such as payout given to 8.69 crore farmers, 20 crore women Jan-dhan account holders will
get an ex gratia amount of ₹ 500 per month for 3 months, government will pay provident fund
contribution for both employer and employee for 3 months under specified conditions and so on. Some
states are also contributing by providing food grains and daily wages to poor. Also India’s Central Bank
joined the fight with sharp interest rate cuts and other conventional methods.

It is one of the biggest Challenge that not only India but the whole world is facing. The Chinese economy
has gone down by 10% of GDP in their first quarter. Global economy could shrink by almost one percent
and according to the Acuite research, each day of the lockdown will cost the Indian economy 4.64 billion
dollar. If the problem last 12 months, the economic impact can be worse than in the Great depression of
1930 which will ultimately hit employment and livelihood of people. Sectors such as tourism, aviation,
hospitality and trade will face the brunt of the severe travel, assembly and activity curbs imposed by the
government. The "Supply-side contagion effect" will impact manufacturing, agriculture and the
pharmaceutical industry. Also, many investors have been facing deep losses in the market due to the
novel coronavirus outbreak. Weaker firms will face cashflow shortages and workers will face cuts or
retrenchments.

This Pandemic not only slams the brakes on economic activity and jeopardize financial stability, but also
brings with It enormous human suffering. Therefore, it is imperative to first save the lives, then save the
livelihoods and after that to meet other cost like loss of jobs a production and supply chain disruptions.

NAME : YUKTI VERMA

REG. NO. : CRO0641909
CONTACT: 9897021812