DHARMASHASTRA NATIONAL LAW UNIVERSITY,

JABALPUR, MADHYA PRADESH

SUBJECT - ECONOMICS

TITLE
INDIA'S POST COVID ECONOMY RECOVERY

SUBMITTED TO
Dr. ISHA WADHWA
ASSISTANT PROFESSOR OF ECONOMICS

SUBMITTED BY
YASH BHINDIYA ( BA LLB HONS. 111/20 )
SEC – B
 Acknowledgment

I would like to express my deep gratitude towards my teacher Dr. Isha Wadhwa for helping me
out through my project. Her suggestions and instructions have served as the major contributor
towards the completion of my project. This project helped me in doing a lot of research and I
came to know about so many new things.
TABLE OF CONTENTS

1. Abstract…………………………………….. 3
2. Chapter 1………………………………….... 4-5
3. Chapter 2………………………………….... 5-6
4. Chapter 3…………………………………… 7-8
5. Chapter 4…………………………………… 8-10
6. Chapter 5………………………………….... 10-11

ABSTRACT

Covid 19 hit India in 2020 and the four months-long lockdown was imposed on the whole
country that brought the economy to a halt. The economy witnessed massive contraction during
the lockdown. But since the second wave has been under controlled the economy has started
recovering. Currently, the Indian economy is in the recovery phase. This research paper tries to
answer the questions like in what form is the post-covid economic recovery is possible, which
economic sectors will play an important role in the recovery, and what schemes and policies are
the government coming up with to ensure the recovery of the economy.
CHAPTER 1
INTRODUCTION
India is Asia's third-largest economy. The ongoing pandemic covid 19 hit India in March 2020
when the government of India imposed the nationwide lockdown for continuously four months.
The nationwide lockdown has heavily affected the economy of India although the GDP of India
was already falling before lockdown. The nationwide lockdown did more damage to the already
falling economy of India. From April to June in 2020 the GDP of India shrank 24% and it shrank
7% more between the following months of July to September. This contraction in the GDP lead
to many consequences by giving rise to poverty, unemployment, and economic injustice among
the Indians. This contraction in the economy affected daily wage earners massively. They were
the ones who suffered most in the times of covid like first, they lost their jobs, and then since
they are economically weak the contraction in the economy affected them more in comparison to
the people involved in the tertiary or quaternary activities since they were doing the work from
home in the lockdown. The GDP of India saw a poor recovery in the last quarter of 2020. In
2021 India started its vaccination program and was looking forward to the unlock. To ensure the
growth of the economy the unlock was important which was to be done in three phases. But even
the vaccination was started in India in 2021 the second wave of covid 19 hit India which lead to
another lockdown in the month of April. But in the second lockdown India saw a growth in the
economy of 20%. It was the same time but last year when Indian economy shrank by 24% in
lockdown but in the second lockdown it grew massively. One of the main reason behind this
growth was that in the first lockdown the demand was contracted and therefore the production
was stopped. The government also issued the orders to close factories, companies, construction
work, and the government also temporarily stopped the tourism which affected the sectors like
aviation, hotels, and more. In the second lockdown, the scene was not the same. Due to
vaccination the time period of second lockdown is less compare to the first lockdown and the
production was not closed by the government during second lockdown. The economy of India
has grown rapidly in the second lockdown but experts are saying that it will take some time to
reach to the pre covid condition. The post covid economy recovery is a gradual process and it
will take time but this recovery can get affected by the third wave of covid 19. If the third wave
also hits hard India like the first two waves then it will shrink more the GDP of India and the
recovery will soon be converted into the contraction. Well, I believe that India’s economy can
only go back to its pre covid position when this covid is finally gone. The new waves will keep
coming and it will become a hinder in the recovery of the economy or in the worst-case scenario
it again shrank the economy of India making it more harder to recovery.

CHAPTER 2

WHICH FORM OF ECONOMIC RECOVERY

There are seven forms of economic recovery such as:

1. V-shaped recovery
2. U shaped recovery
3. W shaped recovery
4. Z shaped recovery
5. L shaped recovery
6. J shaped recovery
7. K shaped recovery

The question here arises is what shape recovery will happen in India. I believe that the recovery
in India can happen in two forms either in w shape recovery or k shape recovery. In the w shape
recovery, there is a decline in the economic growth and then there is a little growth in economy
but soon there is again a decline in the economy stopping the economy to be fully recovered. Its
pattern is, decline then a little growth and then again decline and then the recovery of the
economy. The recovery in the k shape brings back the economy to the pre-decline position. We
had already seen this form of recovery in India. After the lockdown was declared the economy of
India fell sharply by 24% and 7% and then in the last quarter of 2020 there was a little growth in
the economy but then the second wave hit India and there was another lockdown which lead to
the downfall of the economy and now India's economy is rising again. But this pattern and the
recovery of the economy can be disturbed by the third wave. The another form of recovery
which can happen in India is I believe k shape recovery. The k shape recovery is mainly
concerned with two types of sectors i.e. the sector with economic growth and the sector with
stable or declining growth of the economy. It is most likely that India's post covid economic
recovery happens in the k shape. The lockdown in India has affected all the sectors, to some
positively and to some negatively. The sectors like tourism, automobile, hotels were badly
affected by the covid 19 due to lockdown and then there are sectors like agriculture, educational
that were not affected by the covid 19 because they were doing work from home. The k shape
recovery means when some particular sectors show growth in the economy and then there are
some sectors which show decline in the economy. This is currently happening in the India and
the third wave will not affect the k shape recovery because in the first place it is covid which is
responsible for the k shape economy. If there was no covid then there would have been a
different form of recovery or maybe no recovery would have been needed since the economy
would not have been affected. The covid lead to the growth of the economy in some sectors and
covid is responsible for the downfall of the economy in some sectors and therefore I can say that
it is covid which is responsible for the k shape economic recovery and if there would have been
no covid then there would have not been the k shape recovery as all the sectors would have
shown the growth in the economy. The v shape recovery of the Indian economy is almost
impossible as the second wave of covid 19 affected badly to India. In the v shape recovery there
is a sudden downfall of the economy and then a sudden growth in the economy bringing it back
to the pre downfall position. Out of all the recoveries, the v shape recovery is best but it is not
possible in the case of India. The u shape recovery of the economy would have been possible if
there would have not been a second lockdown and since we had the second lockdown it made it
impossible for the economy to recover in the u shape. India is not having L shape economy
recovery as the economy saw growth of 20% between the months of April and July. Since then
the economy is growing although it will take some time to reach to its pre covid position. In the
L shape recovery there is a sudden downfall in the economy and then there is no or very little
and very slow growth in the economy. Some experts may not even consider the L shape recovery
as ‘recovery’. The z and j shape recoveries are also not possible in the case of India's economic
recovery. They might have been possible if there was any other reason besides covid 19 which
was responsible for the downfall of the economy but covid 19 and lockdown just didn’t give any
time to the economy to recover in j or z form. J shape recovery means growth of the economy
after the downfall.

CHAPTER 3

SECTORS THAT WILL PLAY AN IMPORTANT ROLE IN THE

ECONOMIC RECOVERY

There are some sectors that will play an important role in the economic recovery of India. The
covid 19 has hit the economy of India and now its economy is in the recovery phase. The
primary, secondary, tertiary, and quaternary sectors all will have to work equally hard for the
growth of the economy in this post covid era. The sectors that will play an important role in the
economic recovery of India are as follows:

1. Agricultural sector – Agricultural sector is the biggest sector in India and some experts
call it the backbone of the Indian economy. Like other sectors, this sector's economic
growth was also hindered by the covid 19 but as compare to other sectors this sector was
not affected much. Farming is like work from the home profession because the
agricultural lands (farms) of the farmers are very close to their homes and in some cases,
farmers make their homes in a part of their farms. So unlike other professions where
people were not doing their work as they were not allowed to get out of their homes, the
scene was not the same for farmers and they were farming even in the lockdown. The
plus point for the agricultural sector was the arrival of the monsoon on time. There was
no delay in the monsoon and due to this farmers were able to provide crops on time The
agriculture sector constitutes more than 15% of India's GDP and therefore it is a big
sector and this sector will play an important role in the economic recovery of our country.

2. Pharmaceutical sector – I believe that we all can agree that unlike other economic sectors
the pharmaceutical sector is the only one sector that has been not at all affected by covid
19 or shall I say that covid 19 has boosted the economy in the pharmaceutical sector. In
order to be saved from the pandemic, many people bought face masks and sanitizers to
 stop the spread of covid 19 and to save themselves from the virus. Not only in India but
the demand for face masks and sanitizers were high around the world. From my personal
experience, I can tell that there was a time during the pandemic when there was a
shortage of face masks and sanitizers and the pharmacists were charging excessively for
masks and sanitizers. On normal days the price of a mask is around 10 to 20 rupees but in
the pandemic, the price of masks was around 50 rupees. And then the pharmaceutical
sector came up with the vaccines. The serum institute of India has not only provided
vaccines in India but it has provided vaccines around the world also. So in this way, the
growth of the economy has increased in the pharmaceutical sector and therefore this
sector will play an important role in India's post covid economic recovery.

3. Manufacturing sector - The manufacturing sector is directly related to the production of

goods and this sector is one of those sectors which was affected badly by the pandemic
and lockdown in India. Since lockdown was imposed in India all the major production
work was stopped and work from home was not possible in this sector as the
manufacturing of a product may require some heavy machinery. But even if this sector
was badly affected by the lockdown there are some experts who believe that this sector
will make an u shape recovery and will play a major role in India's post covid economic
recovery. Since the second lockdown has shifted and unlock has begun the demand for
certain products has raised rapidly and if there will be more demand then there will be
more production to satisfy the needs of the people. Before the pandemic, the
manufacturing sector was one of the biggest sectors in the Indian economy and it will
regain its pre covid position very soon and will play an important role in the recovery of
India's economy.

CHAPTER 4

POLICIES AND STEPS TAKEN BY THE GOVERNMENT FOR THE

RECOVERY OF ECONOMY
Since the unlock has begun the central and state governments are coming up with various
policies for the recovery of the economy. The implementation of these policies should be done
without any corruption and there should be transparency in the administration to ensure that there
is no corruption going on with these policies as most of these policies are for the economically
weaker sections of the society and any corruption might fail the main purpose of these policies
that is the recovery of the Indian economy and providing some relief to financially weak people.
The policies which are introduced by the government of India for the recovery of the economy
are as follows:

• 20 Lakh Crore package – This package was introduced by the government in 2020 when
the pandemic was at its peak and was affecting the middle class and lower class people
and especially the daily wage earners badly. The package of 20lakh crore aims at
providing some relief to these people and to make India self-reliant. India's 20lakh crore
package is the third-largest relief package in the world and it is around 10% of India's
GDP. Well, but the big figures will not help in recovery unless our administration system
is corruption-free. The package is divided into five tranches and each tranche provides
financial help to various sectors. Like tranche one will provide financial support to
MSMEs enterprises and other businesses and tranche two will provide financial support
to migrants for two months and to farmers too, the third tranche will provide financial
support to the agriculture sector because it is the backbone of our economy, the fourth
and fifth tranche will provide financial support to government reforms like MNREGA
and more. Some experts are saying that this relief package is not going to help India and
some are of the other view but I believe that the government under this package should
have covered a few more sectors that were affected by the pandemic. Anyway as of now
this is the biggest step taken by the central government for the recovery of India's
economy.

Apart from the relief package, I believe that government should take other steps as well for the
economic recovery. Government should give some relief to those people also who have EMIs to
pay but are unable to pay due to lockdown. Many people bought electronic items on EMIs but
when the lockdown was imposed they become unemployed and many lost their jobs too and in
this situation, it will be a little hard for them to pay EMI on time and therefore I believe that the
government should bring some policies for their relief. Apart from this, there were many people
who took loans before the pandemic and even during the pandemic and due to financial crisis
now they are unable to pay the loans on time and government should come up with some policies
for them as well.

CHAPTER 5

CONCLUSION

Well, in the end, I can conclude that covid 19 and lockdown had serious repercussions on the
Indian economy and these repercussions can be continued if the third wave of covid 19 hit India
as seriously as the first two ones. For the speedy recovery of the economy I would suggest that
the government should focus on the vaccination as for now. They should try to vaccinate the
whole population by the end of the December in this year. If they are even 80% to 90%
succeeded in vaccinating the whole population then it will ensure that India is prepared for the
next wave and when the next wave will come it will not do much damage in comparison to the
first two ones. By vaccination, we can break the chain of the spread of covid 19 and through this
government might not need to pull another lockdown. In this way, the economy will not be on a
halt again. At the beginning of the vaccination campaign, there were some problems as there was
a shortage of covid vaccines in many parts of the country but now the government is producing
enough vaccines for each part of the country and the government is also making sure that the
vaccines reach to the all parts of India and no city shall be left behind. Giving vaccination doses
for free was a good plan from the government as it increased the accessibility of the vaccination
doses to the poor people. It will be quite irresponsible of the government if they don’t learn from
their mistakes from previous lockdowns and repeat the same mistakes again as it might again
bring the economy to halt and its recovery will soon turn into contraction. To ensure the recovery
of the economy apart from the vaccination campaign, the government should also focus on
providing some relief to the economically weak people. The Epidemic Disease Act, 1987 was of
very little help during the time of the covid 19 pandemic and therefore it was amended in 2020 as
many of its provisions are not useful in contemporary time but I believe that they should have
done this way before instead of waiting for a pandemic and then amending it. They should have
amended this act at least five years ago and they should have put some provisions into it which
deal with the economy in times of an epidemic. If we have had proper laws to govern our
economy in the first place then our economy would not have been contracted or chances for the
same would have been low during a pandemic.
Research Problem

Covid 19 and the lockdown contracted the Indian economy heavily and now the economy is in
the recovery stage. What policies are the government making for the economic recovery of the
country? Will those policies be successful as many experts have scrutinized the policies and are
of the view that these policies will not be much effective? And what sectors will play an
important role in the recovery of the GDP?

Research Questions

1. What sectors will play an important role for the economic recovery of India? If the third
wave came then will these sectors be in any position as they were in the pre-covid era?
2. The government is coming up with many new schemes and policies like the 20 lakh relief
package and more but will these schemes and policies be effective or do we need more
better policies?
 3. India's post covid economic recovery is one of the biggest challenges for the ruling
government and they are also focusing on the policy of self-reliant India but is the policy
of self-reliant India possible when the the economy is in its worst figures?
4. There are seven forms of economic recovery. Which form of economic recovery is most
likely to happen in India?
5. Indian economy is Asia's third-largest economy so when the Indian economy contracted
what repercussions it had on Asian countries?

Research Objectives

1. To understand the preparations of the government to deal with the third wave and how
will they stop the third wave from affecting the economy.
2. To understand that what forms of economic recovery are possible in India.
3. To understand the roles of big economic sectors in India's post covid economic recovery.
4. To understand the different policies and schemes the government has announced for the
recovery of economy.
5. To understand that why in the first place Indian economy contracted.

Research Methodology

Doctrinal research is done to shape this project. I have read some articles and a few books on this
topic. I have also read about this topic on the internet. Doctrinal research is done in order to
know things such as -:

1. Various schemes and policies for the recovery of the Indian economy.
2. How does the contraction in the Indian economy affected other countries.