A. Muh.

Alif Rumansyah

185020307111031

THE IMPACT OF CORONA VIRUS (COVID-19) IN INDIA

The Country Profile :

India is one of the oldest civilizations in the world with a kaleidoscopic variety
and rich cultural heritage. It has achieved all-round socio-economic progress since
its Independence. India has become self-sufficient in agricultural production and
is now one of the top industrialised countries in the world and one of the few
nations to have gone into outer space to conquer nature for the benefit of the
people. It covers an area of 32,87,263 sq. km (1,269,346 sq mi), extending from
the snow-covered Himalayan heights to the tropical rain forests of the south. As
the 7th largest country in the world, India stands apart from the rest of Asia,
marked off as it is by mountains and the sea, which give the country a distinct
geographical entity. Bounded by the Great Himalayas in the north, it stretches
southwards and at the Tropic of Cancer, tapers off into the Indian Ocean between
the Bay of Bengal on the east and the Arabian Sea on the west. [CITATION ind21 \l
1033 ]

Economy overview:

India's diverse economy encompasses traditional village farming, modern

agriculture, handicrafts, a wide range of modern industries, and a multitude of
services. Slightly less than half of the workforce is in agriculture, but services are
the major source of economic growth, accounting for nearly two-thirds of India's
output but employing less than one-third of its labor force. India has capitalized
on its large educated English-speaking population to become a major exporter of
information technology services, business outsourcing services, and software
workers. Nevertheless, per capita income remains below the world average. India
is developing into an open market economy, yet traces of its past autarkic policies
remain[ CITATION IBE21 \l 1033 ].

India recorded the real GDP (gross domestic product) growth of 0.4% in the third
quarter of FY21, as per the NSO's (National Statistical Office) second advance
estimates. This rise indicates V-shaped recovery progression that started in the
second quarter of FY21.

India is expected to be the third largest consumer economy as its consumption

may triple to US$ 4 trillion by 2025, owing to shift in consumer behaviour and
expenditure pattern, according to a Boston Consulting Group (BCG) report. It is
estimated to surpass USA to become the second largest economy in terms of
purchasing power parity (PPP) by 2040 as per a report by
PricewaterhouseCoopers.

Population:

India as the second country largest population in the world. The current
population of india in 2021 is 1,393,409,038 a 0.97% increase from 2020 based
on Worldometer elaboration of the latest United Nations data. [ CITATION wor21 \l
1033 ]

According to current estimates, India’s population will peak in the early 2060s at
1.7 billion, putting additional pressure on the environment and natural resources
and boosting greenhouse gas emissions-though the average Indian generates a
fraction of the planet-warming emissions produced by the average American or
European. Most of India’s population increase by mid-century will be due to
demographic momentum, meaning that even as fertility rates fall below
replacement levels, the large numbers of young people will continue to boost the
country’s population, according to P. Arokiasamy, head of the Department of
Development Studies at the Indian Institute of Population Sciences in Mumbai.

Covid-19 Case:

the COVID-19 pandemic in India is part of the worldwide pandemic of

coronavirus disease 2019 (COVID-19) caused by severe acute respiratory
syndrome coronavirus 2 (SARS-CoV-2). The first case of COVID-19 in India,
which originated from China, was reported on 30 January 2020. India currently
has the largest number of confirmed cases in Asia. As of 4 june 2021, India has
the second-highest number of confirmed cases in the world (after the United
States) with 28,572,359 million reported cases of COVID-19 infection and the
third-highest number of COVID-19 deaths (after the United States and Brazil) at
340,719 deaths.[ CITATION bin21 \l 1033 ]

The first cases of COVID-19 in India were reported in the towns of Thrissur,
Alappuzha and Kasargod, all in the state of Kerala, among three Indian medical
students who had returned from Wuhan. Lockdowns were announced in Kerala on
23 March, and in the rest of the country on 25 March. By mid-May 2020, five
cities accounted for around half of all reported cases in the country: Mumbai,
Delhi, Ahmedabad, Chennai, and Thane. On 10 June 2020, India's recoveries
exceeded active cases for the first time. Infection rates started to drop in
September 2020, along with the number of new and active cases. Daily cases
peaked mid-September with over 90,000 cases reported per-day, dropping to
below 15,000 in January 2021.

A second wave beginning in March 2021 was much larger than the first, with
shortages of vaccines, hospital beds, oxygen cylinders and other medicines in
parts of the country. By late April, India led the world in new and active cases. On
30 April 2021, it became the first country to report over 400,000 new cases in a
24-hour period. Health experts believe that India's figures have been
underreported due to several factors.

India began its vaccination programme on 16 January 2021, and by April was
administering 3–4 million doses a day. India has authorised the British Oxford–
AstraZeneca vaccine (Covishield), the Indian BBV152 (Covaxin) vaccine, and the
Russian Sputnik V vaccine for emergency use. As of 25 May 2021, the country
had administered over 200 million vaccine doses.

The impact on the country in financial aspects:

The Covid-19 global pandemic was a double blow for the already struggling
Indian economy. According to the World Bank, the current pandemic has
‘magnified pre-existing risks to India’s economic outlook’. What began as a
health crisis, quickly extended into a business crisis. Hardly any business sector
has been left untouched by the Covid-19 outbreak: aviation, tourism,
manufacturing, transport, banking, financial services, and insurance (BFSI), and
retail sectors top the list.[ CITATION kha21 \l 1033 ]

In March, India imposed a nationwide lockdown with the hope of containing the
outbreak. The Indian lockdown, which lasted for almost three months, supposedly
had the most stringent lockdowns the world had seen. To steer the country
through these unprecedented times, India’s central bank (the Reserve Bank of
India) and the Indian government implemented several measures: fiscal,
legislative and operational. The Government of India began a series of initiatives.
All non-essential services in the country were halted (insurance was classified as
essential), and an aid package of more than USD 260bn was made available with
aim of creating a self-reliant India. Several labour law initiatives were also
undertaken. Healthcare also witnessed a drastic shift with the opening-up of the
telemedicine in India with remote treatments being made accessible. [ CITATION
bar21 \l 1033 ]

Big companies in India like TATA Motors, BHEL, Aditya Birla, Larsen and
Turbo reduced their Industrial operation. Indian Banking sector get affected from
Corona Pandemic. Banks get outbreak due to novel Corona Virus. Borrowers and
Industries face the dangerous problem like job losses, slowdown in sales and
decreased in the profit as virus spread in overall India. Banking customer wanted
some financial relief and Reserve Bank of India encouraging national banks to
provide the relief by framing good banking policies towards customer. For
security issues amongst employees, it was decided to give facility for employees
to work from remote areas.[ CITATION Bob20 \l 1033 ]

World Health Organization (WHO) has advised people to use contactless payment
and avoid handling banking notes as much as possible. As it was found that
corona virus lives in banking notes for days and accelerating spreads of the
desease. One of the good reforms started in india due to corona virus is banks are
anticipating this shift towards digital marketing. Now in india people rely on
online banking, telephone banking, and call center. HSBC Banks in india started
working dividing the people. At bank level problem of non-performing asset has
increased. Spike increased on NPA in india. Currently NPA rate in India similarly
to china like 2% but the credit costs ratio could be worse. Indian Banking System
converted from stable to negative, as continuously disruption in economy activity
caused by the COVID-19 pandemic and an decline in asset quality. From the
research it was known that quality of the asset continuously goes down from
corporate Small and Medium Enterprises (SME), and retail segment for lending to
pressure on profitability and capital for lenders. Reduced productivity and
lockdowns have already started to take a toll on the financials of the corporate
sector. Indian Banks face so many challenges due to COVID -19 Pandemic. The
total operating environment is negative due to uncertainty surrounding the
severity and duration of the pandemic and the associated effects on india’s bank of
restrictions on economic activity. India’s Bank already faced weak business and
consumer confidence. Global risk aversion has hit the Indian Financial Market.

The Impact on the country transportation aspects:

Transportation is the first sector to be affected by COVID. People are not stepping
out of their homes for security purposes. This has slowed down public and
commercial transportation, especially rail and road transportation services.
Intercity travel also saw some heat.

India was implemented a 68-day locdown in four phases stretching from march 25
to may 31 2020 the result form the policy there are some decreasing movement of
rail passengers and cargo during the lockdown. In freight sector the daily freight
activites decreasing from 3 milliom tons to 2 millions tons during lockdown in
india while the daily passenger non-suburban (intercity) special migrant rail
rideship decreasing from 10 million passengers to 0.17 passengers during
lockdown. the traffic data in India’s 12 major ports has decreased from 60.1
million tonnes to 47.4 during lockdown period while the road accidents per day
totally decreased from 1280 accidents to 47 accidents. [ CITATION oec20 \l 1033 ]

The Impact on the country industrial aspects:

In March 2021 the IHS Markit India Manufacturing Purchasing Managers’ Index
(PMI) slipped to a seven-month low of 55.4 from 57.5 in February 2021. Data for
April indicates a slight improvement to 55.5 after declining to a seven-month low
in March at 55.4. This marginal increase doesn’t hide the fact that “the headwinds
facing manufacturers cannot be ignored. The surge in COVID-19 cases could
dampen demand further when firms’ financials are already susceptible to the
hurdle of rising global prices.[ CITATION the21 \l 1033 ]

India’s GDP for the first quarter (Q1) of 2020-21 contracted by 23.9% and the
share of the manufacturing sector in total gross value added (GVA) which was
17.5% in Q1 of 2019-20 shrunk to 13.8% in this quarter. Growth rate in the
manufacturing sector has plunged to -39.3% in Q1 of 2020-21. For consecutive
eight quarters manufacturing growth rate has declined, indicating a lack of
demand and a deeper structural crisis in the sector worsened by the pandemic-
induced lockdowns.[ CITATION the21 \l 1033 ]

Imports of heavy machineries and equipment on which our manufacturing and

other industries are crucially dependent has been going down. The import of these
capital goods is important for maintaining a threshold on output expansion, as
many sectors that feature in India’s major exports are also in India’s top imports.
Last year India came out with a negative import list for defence equipment,
ostensibly to boost the ‘Make in India’ programme. But big ‘Make in India’
projects have simply not taken off. And the manufacturing crisis has been
worsened by COVID-19. Fiscal stimulus from the government initiative has not
been enough. Almost exclusively supplying to other industries, the MSME
(Micro, Small and Medium Enterprises) sector is labour-intensive and the lifeline
of India’s manufacturing sector. Production cuts in the manufacturing sector have
had a percolating negative impact on the component industries, predominantly
suspending operations of MSMEs engaged in the small and spare parts
manufacturing. As intermittent lockdowns are imposed once again a majority of
the manufacturing workers have returned to their hometowns because of
uncertainty and a lack of income.

According to a survey conducted by United Nations Industrial Development

Organization (UNIDO), after lockdown was imposed last year, manufacturing in
India had stopped, except for the rice milling sector where production reportedly
dropped by half. In manufacturing, some of the most affected industries have been
metals and chemical products, motor vehicles, machinery and equipment, textiles,
etc.

The Impact on the Country Education Aspects:

COVID-19 has affected a large number of students across states, class, caste,
gender and region. The shutting down of schools and the decision of shifting
traditional classrooms to digital platforms is not only increasing learning
inequality among children, but also pushing a large number of children out of
school due to the digital divide. Other than learning, the absence of schooling
would also have a long-lasting effect on the health and nutrition of children. The
role of the budget in the current situation as well as beyond the pandemic is very
crucial to ensure inclusive education for all.

In India, school closures have affected 320 million students. However, only 37.6
million children across 16 states are continuing education through various
education initiatives such as online classrooms and radio programmes etc. A
recent survey in West Bengal has found that child labour among school-going
children has increased by 105 per cent during the pandemic. Another survey by
Save the Children during the pandemic reports the discontinuation of children's
education in 62 per cent of the surveyed households with 67 per cent in rural and
55 per cent in urban areas, respectively. Widespread unemployment and income
loss will hinder the ability of households to pay to keep students in schools. This
impact will be greater for poorer households who might face budget constraints.
This will cause children to drop out of schools and be pulled into economic
activities to support their parents' in earning. [ CITATION Kun20 \l 1033 ]

The situation of dropout rates and out-of-school children was already poor even
prior to COVID-19. According to NSS 75 Round Household Survey 2017-2018,
around 3.22 crore children in the 6-17 year age group are out of school, 31 per
cent of whom have never attended any school. These figures were higher for rural
areas as compared to urban areas. The major reasons cited for being out-ofschool
are engagement in economic activities and participation in household chores.

Conclusion:
India has had more Covid-19 cases in the last month than anywhere else in the
world. Experts believe the real death toll may be higher than the official numbers.
Covid-19 has made impact to every sectors in all country around the world
including india, even before covid-19 exist india has been struggle all over the
problem from the massive population in the country. Therefore, due the global
pandemic covid-19 made everything worse in all sectors (economic,
transportation, education, industrial etc.)

Therefore, it is suggested that the government should adopt a two-pronged

approach to deal with the pendemic crisis. It will have to gear up its machinery to
ensure a quick and strong recovery. First, these will involve major contributions
from the central bank, the commercial banks, the financial institutions and other
agencies in manoeuvring policies as per the demand of the situation. Second and
importantly, it will have to motivate and involve the public and private enterprises
in responding to the situation. The mammoth nature of the problem warrants
strong support from all the stakeholders. The government should make it clear
that everything should not be left to the government alone. A strong sense of
responsibility will have to be inculcated amongst the public, private enterprises,
industrialists, workers, and all other non-government stakeholders. There is a limit
up to which the government alone can take on the fight. It is important, therefore,
that the government initially only prepares other stakeholders for assuming a good
amount of responsibility in taking on the recovery process.
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