PROJECT REORT

ON
Impact of covid-19 on aggregate production in industrial sector.

SUBMITTED TO- SUBMITTED BY-

DR. KANUPRIYA MISRA BAKHRU AMAR SHUKLA(19103131)
JYOTI BAJAJ(19103145)
ABHIJEET RANA(19103149)
PARIKSHIT SHARMA(19103317)
CONTENT-
1.Introduction.
2.Global Impact.
3.Impact of covid-19 on aggregate
production.
4. Impact of COVID-19 on people's
livelihoods.
5.Impact of COVID-19 on poverty.
6.Conclusion.
1.INTRODUCTION-
➢The sudden appearance of Coronavirus disease in 2019 was firstly
reported in Wuhan city in China.The disease is infectious and has been
spreading drastically all over the world.
➢The Corona Pandemic has probably given the biggest blow to the World
economy after the great depression of 1930’s.
➢Around sixty percent of the world population is either under severe or
partial lock down without having medical solution to the Corona virus and
economic activity across countries has either stalled or significantly
decelerated taking away millions of livelihoods.
➢India being densely populated country with inadequate medical facilities
was left with no option but followed the policy of lockdown. World economy is
heading for a recession and India is no exception.
➢The fall out of the Covid-19 on Indian economy is going to be huge because
of its own lockdown, which was necessary to contain the Corona spread, and
also because of India’s integration with the rest of the world.
➢Here is a preliminary assessment of the likely fall out of the lockdown and
restrictive policy measures owing to Pandamic on India’s aggregate
production in industrial sector.
2. GLOBAL IMPACT-
Manufacturing Industry-
➢Manufacturing sector is heavily hit by the impact of the virus, as it shut the
production and factory operations in the automotive, electronics, aerospace,
and others.
➢It all originated from China, which is the hub for the supply of raw materials
to the global companies in the global market, then it impacted the whole
supply chain for the manufacturing companies in order to follow lockdown,
social distancing, and prevent coronavirus spread measures suggested by
the local government.
➢The lockdown was aimed to bring component manufacturing plants to a
halt and derail the entire supply chain of the company.
➢It is estimated that over 75% of the total businesses in the world are direct
or indirect contact for the procurement of raw materials from China
companies and almost 950 Fortune 1000 companies have tier 2 suppliers in
China.
➢Moreover, as per the United Nations Conference on Trade and Development
(UNCTAD) prediction that the global foreign direct investment (FDI) will reduce
by 5% to 15% owing to fall in the operations of manufacturing companies in
terms of factory shutdown.
Agriculture -
➢Agriculture is a foremost one. According to some reports, an average of
about one farmer is committing suicide for every 30 minutes due to debt.
➢Today situation of agriculture has become so worse than earlier that
shortage of harvest labour, improper transport facilities were added as
special hardships to farmer society. These situations have led to a reduction
in production from farmer’s side.

Impact on the Pharma Manufacturing Industry-

➢COVID-19 created a disrupted effect in the pharma industry and further
leads an incredible pressure on the companies to maintain a positive supply
of medical products, creating a problem of shortage.
➢The countries are dependent on the partnered countries for the raw
materials in the pharma industry are heavily impacted by this spread of the
virus, as it created a halt in the supply of all products between two countries.
➢For instance, the US are greatly depending on the Asian companies for the
raw materials related to pharmaceutical and medical devices and now they
are facing high risks in supply shortages.
➢Currently, China is the leading producer and supplier of the active
pharmaceutical ingredients (API) in the global market.
➢Around 80% of Indian APIs are arrival from the Chinese companies, while
the US’s 13% of the medical supplies are producing by the Chinese.
➢Thus, these statistics stated that the pharma manufacturing companies in
these countries have suffered heavily after the outbreak of the pandemic.
➢In the industry, the virus enforced many pharma manufacturing to extends
its production capabilities to produce masks, ventilators, sanitizers, and other
pharma cleaning products to minimize the impact of the pandemic to some
extent.

Impact on the Food & Beverage Industry-

➢Considering the current market conditions, the virus is rapidly impacting the
consumption and supply chain for the companies in the market.
➢There is a wide increase in the alcohol-based cleaning sanitizers and
important daily consuming food products, which makes consumers panicking
in the market and this results in grocery shelves to face scarcity.
➢This disturbs the supply chain and suddenly created the demand for a high
amount of raw materials and ingredients to the F&B companies.
➢This hampered the production and forcing them to shut operations due to
limited manpower availability.
➢It is expected that the F&B companies suffered a revenue loss of around
22% worldwide, as followed by the French trade group ANIA study.

Impact on the Personal Care & Cosmetics Manufacturing Industry-

➢The industry primarily comprises products related to skin care, fragrances &
perfumes, haircare, and others.
➢These all products witness a wide downfall in the demand and consumption
owing to halt in operation across the online and offline distribution channels
in the global market.
➢Considering many countries operations in the pandemic situation, there is
still a lockdown and pause in the supply of any kind of non-essential products.
➢This decrease in demand from the end-users and limited manpower
engagement in the production areas are resulted in the shutting production
operation of the companies and stops trade of personal care & cosmetics
products in the market.
➢The industry mainly affected owing to the halting distribution of non-
essential products of e-commerce companies such as Amazon, Alibaba, and
Flipkart. Moreover, hypermarket and supermarket companies also halted the
distribution of non-essential products in some countries.
Trade -
➢Import and export are always two sides of a coin i.e., trade. Due to trade
decline, aviation International flights are affecting with great hit. The former
two aspects play a crucial role towards Indian economy in day-to-day. In such
widespread situation Indian government is forced to run in major loss of trade
economy.

Electronics-
➢ India is a major importer of electronics. Most of the electronic items that
are imported now fell lie in storages in due situation and their maintenance
has become greater challenge to the company service men.
➢If situation continues, there might be a great hike in rates of electronic
goods after the relaxation of pandemic corona. Electronic department is trying
their best to come out of this critical situation although it’s becoming meagre.

Automobile-
➢ In general, about lakhs of cars and bikes would be produced every year by
the industries, but as of now not even a single industry is opened for
production. Also, there’s a great scope for losses to automobile industries if
this continues.
Iron & Steel and Mineral Processing-
➢ Iron and steel are the basic raw material for many industries. All the
industries are shut down due to their less usage.
➢Mining and mineral processing were totally shut across the world. So,
there’s almost less supply of minerals. Due to this petroleum and its products
supply has come down.
➢The import of petroleum has declined in such a great range i.e., from few
million litres in normal days to mere thousands of tons today.

Real Estate-
➢ Real Estate businesses have paused-up since last few weeks. All the
construction work has come to stand-still due to various reasons although,
main reason being lock down.

Software-
➢There are many software industries rooted-out in every corner of the
society. These software workers are now aiming at work from home projects
but sitting and working for longer hours may affect them in the form of
scoliosis.
 Education-
➢ COVID-19 also had a greater impact over students. Not even a single school
or an institute is open for students to attend. Since it’s started amidst the SSC
and intermediate board examination, they were cancelled and the new exam
schedule is yet to be declared.
➢Even in banking sector, investments and transactions are totally on hold.
Even some pharma industries are on their way in work increasing their pace
they are also on throw back. Paper industry also affected very badly as the
usage of paper has declined to a maximum extent due to closure of various
government and social institutions.

Tourism-
➢ More than one lakh of people in India depend on tourism for livelihood
whereas in today, from Chandni - chowk market in Delhi till rushy Streets of
charminar have come to a
stand-still positions.
➢Also, whole tourism department has been locking down due to pandemic
fear. According to estimates, complete lock down of tourism has thrown
government in to economic loss of about 20000 to 30000 crores.
Transport-
➢ Railways is another important corner which is at most affected. There will
arise huge loss per single day railway lock down whereas today one can
imagine how much economic loss may occur in today situation.
➢Along with the above, Roadways also stopped working. During the RTC
strike also wheels on roads were paused which later fined government to
spend cores of rupees for repairing those buses, again today similar
situation may arise loading double burden on government amidst the lock
down crisis.
Human Resource-
➢ As the corona virus pandemic hits jobs and wages in many sectors of the
global economy that depend on migrants, a slowdown in the amount of money
these workers send back home to their families looks increasingly likely.
➢These international remittances will be crucial in transmitting the unfolding
economic crisis in richer countries to poorer countries. They will fundamentally
shape how, and the pace at which, the world recovers from coronavirus.
➢Remittances shelter a large number of poor and vulnerable households,
underpinning the survival strategies of over 1 billion people.
➢In 2019, an estimated 200 million people in the global migrant workforce
sent home US$715 billion (£571 billion).
➢Of this, it’s estimated US$551 billion supported up to 800 million
households living in low- and middle-income countries.
➢Migrant workers sent home billions in cash every year. This money is vital for
local communities and economies.
➢The disruption caused by coronavirus could have a significant impact on
these remittance flows.
3. Impact of COVID-19 On Aggregate Production-
➢The global production and supply chain system is mostly disrupted due to
widespread of the coronavirus pandemic (COVID-19). Most of the industrial
managers and policymakers are searching for adequate strategies and
policies for revamping production patterns and meet consumer demand.
➢Form global supply chain perspectives, the majority of raw materials are
imported from China and other Asian developing nations. The COVID-19
pandemic has broken the most of transportation links and distribution
mechanisms between suppliers, production facilities and customers.
➢Most of the prominent economies around the world enforced a total
lockdown, and the focus has since shifted to surge in demand for essential
products and services. This has led to a decline in demand for some
nonessential products and services.
➢The implications of COVID pandemic on sustainable production and
consumption trends would be worthy to note, and hence, a considerable
change is likely to be seen in the coming months and years.
➢The availability and production of many essential items such as food,
grocery, and pharmaceutical products are drastically reduced, and a huge
mismatch between supply and demand is observed.
➢In the meantime, the coronavirus pandemic is having a positive impact on
the environmental side of production, due to shut down of many
manufacturing units and significant reductions in logistics and distribution
operations.
➢However, the supply chain network showed poor resilience to this
pandemic, and nearly 35% of the manufacturer reported its supply chain
network failure due to global coronavirus pandemic.
4.Impact of COVID-19 on people's livelihoods-
➢The COVID-19 pandemic has led to a dramatic loss of human life worldwide
and presents an unprecedented challenge to public health, food systems and
the world of work.
➢The economic and social disruption caused by the pandemic is devastating:
tens of millions of people are at risk of falling into extreme poverty, while the
number of undernourished people, currently estimated at nearly 690 million,
could increase by up to 132 million by the end of the year.
➢Millions of enterprises face an existential threat. Nearly half of the world’s
3.3 billion global workforce are at risk of losing their livelihoods.
➢Informal economy workers are particularly vulnerable because the majority
lack social protection and access to quality health care and have lost access
to productive assets.
➢Without the means to earn an income during lockdowns, many are unable
to feed themselves and their families. For most, no income means no food,
or, at best, less food and less nutritious food.
➢The pandemic has been affecting the entire food system and has laid bare
its fragility.
➢Border closures, trade restrictions and confinement measures have been
preventing farmers from accessing markets, including for buying inputs and
selling their produce, and agricultural workers from harvesting crops, thus
disrupting domestic and international food supply chains and reducing
access to healthy, safe and diverse diets.
➢The pandemic has decimated jobs and placed millions of livelihoods at risk.
As breadwinners lose jobs, fall ill and die, the food security and nutrition of
millions of women and men are under threat, with those in low-income
countries, particularly the most marginalized populations, which include
small-scale farmers and indigenous peoples, being hardest hit.
5. Impact of COVID-19 on Poverty-
➢The consequences of the COVID-19 pandemic are stretching far beyond the
spread of the disease. Efforts to contain transmission have triggered the
worst global economic crisis in a century, devastating the livelihoods of
millions.
➢In the developing world, reduced incomes, food insecurity, inadequate
education, and increased domestic violence, are all contributing to a
worsening in welfare and poverty.
➢Poverty is expected to increase for the first time since 1998, erasing the
progress made in the past five years and threatening the goal of eradicating
extreme poverty by 2030, particularly in fragile states where most of the
global extreme poor will reside.
➢Around 40 to 60 million additional people could fall into extreme poverty in
2020 compared to 2019.
➢The increase in poverty has been driven by large and sustained falls in
income, leading to the depletion of savings and food insecurity. On top of that,
welfare is being further eroded from the impact of widespread school closures
and a higher incidence of domestic violence.
➢COVID-19 has seriously affected these trends in ways that are still not
clear-cut.
➢There are 12 countries that are likely to see an increase in poverty of over 1
million people in 2020 as a result of COVID-19. They are in Asia and Africa,
with Brazil as the sole exception.
➢India and Nigeria stand out as likely to add 10 million and 8 million to the
poverty rolls in 2020. In all these countries, COVID-19 has demonstrated the
vulnerability of people who have only recently been able to escape poverty.
 6.Conclusion-
Considering the impact of COVID-19 to the manufacturing industries are
expected to result in reduced demand and disrupted supply chain flow. In
addition, the virus is also creating opportunities for the companies to
re-innovate and change with time to remain relevant. The operation can be
redesign and restarted with key development in the operation sites –
•Remeasures worker safety with the mandatory use of hygiene & sanitization
products at worksites.
•Reintroduce souring supplies .
•Rationalize their product ranges.
•Reevaluate the supply chain issues and make it agile and strong
•Reintroduce the emergency response plans.
•Bring optimization in the distribution channel, i.e. online and offline channels.
•Change in pricing and promotion strategies through reviewing customer
behavior.
According to many industry experts, the incorporation of software and
automated technologies for the factory operations and workers safety is
expected to enhance the production capacities of the companies, along with
the product quality with the limited spread of COVID-19 in the manufacturing
facilities in the post-pandemic conditions to gain employee and consumer trust.