DHARMASHASTRA NATIONAL LAW UNIVERSITY

JABALPUR

ACADEMIC SESSION 2019-20

PROJECT WORK IN THE SUBJECT

ECONOMICS -I

ON THE TOPIC:

ECONOMIC IMPACT OF COVID 19

SUBMITTED TO: SUBMITTED BY:

Dr. Isha Wadhwa Mona Parmar

(Assistant Professor of Economics) BAL/078/19

3rd SEMESTER

SECTION “B”

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 ACKNOWLEDGEMENT

I would like to express my gratitude and special thanks to Professor BALRAJ SINGH
CHAUHAN (Vice Chancellor), DR. V.S.GIGIMON (HEAD OF DEPARTMENT), Ms.
SHRUTI NANDWANA (ASSISTANT PROFESSOR OF LAW), Mr. ABHISHEK SINGH
NEGI ( RESEARCH-CUMTEACHING ASSISTANT) and our Mr. YOGESH BAJPAI
(Deputy Librarian) of Dharmashastra National Law University, Jabalpur for their valuable
guidance, support and cooperation in completion of this project and given me this wonderful
opportunity in learning the new topic and so many things , so I am very thankful to them.

I would also like to thank my parents and friends who helped me with their suggestions and
guidance and spent their valuable time with me which resulted to the successful com

MONA PARMAR

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 ABSTRACT

The outbreak of the Covid-19 pandemic is an extraordinary stun to the economy. The
economy was at that point in a parlous state before Covid-19 struck. With the delayed
nationwide lockdown, worldwide monetary decline and related disturbance of interest and
gracefully chains, the economy is prone to confront an extended time of stoppage. The size of
the monetary effect will rely on the length and seriousness of the wellbeing emergency, the
term of the lockdown and the way where the circumstance unfurls once the lockdown is
lifted. In this paper we depict the condition of the economy in the pre-Covid-19 period,
evaluate the expected effect of the stun on different sections of the economy, dissect the
approaches that have been declared so far by the focal government and the Save Bank of
India to improve the financial stun and set forward a lot of strategy proposals for explicit
divisions. This researcher paper discusses the sector wise impact of covid 19 on economy
what measure to taken by the government to curb this situation and how economy is
recovering in unlock situation.

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 TABLE OF CONTENTS

Chapter 1

Research objective…………………………………………………………………………..…5
Research question………………………………………………………………………….…..5
Research methodology…………………………………………………………………….…..5
Literature review…………………………………………………………………………….…
5

Chapter 2

Introduction..............................................................................................................................................6
Covid-19 Could Affect The Global Economy Through Three Channels................................................7
Impact Of Covid-19 On The Indian Economy........................................................................................8
Sector-Wise Impact On Indian Industry................................................................................................11
Government Actions..............................................................................................................................14
Economic Situation................................................................................................................................15
Economic Recovery...............................................................................................................................17

Chapter 3

Suggestion and
Conclusion.......................................................................................................14

Chapter 4

Bibliography.............................................................................................................................20

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RESEARCH OBJECTIVE

The study is indicated briefly to analyse the situation of pandemic and its economic impact of
covid-19 on the society. And how this virus, COVID-19 affect the Indian and economy and
also discuss about the measures to be taken for curbing the situation.

RESEARCH QUESTION

1. Analyses The epidemic situation in the world

2. Define, how covid-19 effect the global economy.
3. Impact of covid-19 on the Indian Economy.
4. Sector-wise impact of covid-19 on Indian Industry
5. Government measure for solving the situation
6. Economy Recover in Unlock period.

RESEARCH METHODOOGY

The objective of the study is to analyse the economic impact of covid-19. Further, exploring
their current status in India and suggesting innovative strategies to be adopted. The research
analysis is based purely on secondary data and is collected from various articles, Reports,
newspaper, journals to understand the impact of covid-19 at society.

LITERATURE REVIEW

This assignment is totally based on secondary data. I have tried my to analyse the economic
situation of the world during the pandemic and impact of covid-19 on Indian economy. And
also tried to provide some measures.

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INTRODUCTION

The COVID-19 episode was set off in December 2019 in the city of Wuhan, which is in the
Hubei area of China. The infection keeps on spreading over the world. Despite the fact that
the focal point of the flare-up was at first China, with detailed cases either in China or in
explorers from the nation, cases currently are being accounted for in numerous other nations.
While a few nations have had the option to successfully treat revealed cases, it is unsure
where and when new cases will develop. In the midst of the critical public wellbeing hazard
COVID-19 postures to the world, the World Health Organization (WHO) 1 has proclaimed a
general wellbeing crisis of worldwide worry to organize global reactions to the illness. It is,
in any case, presently discussed whether COVID-19 could conceivably raise to a worldwide

The COVID-19 episode was set off in December 2019 in the city of Wuhan, which is in the
Hubei area of China. The infection keeps on spreading over the world. In spite of the fact that
the focal point of the episode was at first China, with announced cases either in China or in
explorers from the nation, cases currently are being accounted for in numerous different
nations. While a few nations have had the option to adequately treat revealed cases, it is
dubious where and when new cases will develop. In the midst of the noteworthy general
wellbeing hazard COVID-19 postures to the world, the World Health Organization (WHO)
has pronounced a general wellbeing crisis of worldwide worry to arrange global reactions to
the malady. It is, be that as it may, presently discussed whether COVID-19 might raise to a
worldwide pandemic. The COVID-19 pandemic has had broad results past the spread of the
infection itself and endeavours to isolate it. As the SARS-CoV-2 infection has spread the
world over, concerns have moved from flexibly side assembling issues to diminished
business in the administrations part. The pandemic caused the biggest worldwide downturn
ever, with in excess of 33%2 of the worldwide populace at the time being put on lockdown.

The monetary aftermath from this pandemic is probably going to injure even the strongest of
business sectors, compromising public and worldwide development. Despite the fact that the
1
McFall-Johnsen, Juliana Kaplan, Lauren Frias, Morgan (14 March 2020). "A third of the global population is
on coronavirus lockdown — here's our constantly updated list of countries and restrictions". Business Insider
Australia. Retrieved 15 April 2020.
2
Schwartz, Nelson D. (21 March 2020). "Coronavirus Recession Looms, Its Course 'Unrecognizable'". The New
York Times. Archived from the original on 24 March 2020. Retrieved 24 March 2020

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microorganism has not yet finished its reality visit, the worldwide economy is now giving
indications of easing back down. Administration areas, including avionics, travel, and the
travel industry, are being hit the hardest. Business movement has come to a standstill in
numerous areas. Carriers have just encountered a precarious fall in rush hour gridlock on
their most noteworthy benefit global courses. In the US, practically 6.6 million laborers
petitioned for joblessness benefits toward the finish of March, finishing a long-term dash of
work development. Over 60% of Americans have lost hours or pay, been laid off, or shut a
business in light of the pandemic, with forecasts that the US jobless rate could reach as much
as 30% in the subsequent quarter. The British Chambers of Commerce uncovered that by
early April, 32% of organizations in the United Kingdom will have incidentally laid-off staff.
In some low-salary nations, the casual division is a significant wellspring of work. In huge
numbers of these laborers, cash-based use for medical services as of now includes an
enormous extent of family unit salaries. Expanded requests on families are probably going to
drive them further into destitution. The Organization for Economic Co-activity and
Development (OECD)3 predicts that a few nations could be managing the financial aftermath
of the COVID-19 pandemic for quite a long time to come.

COVID-19 COULD AFFECT THE GLOBAL ECONOMY, THROUGH THREE

CHANNELS:

 Direct sway on creation: Chinese creation has just been considerably influenced by the

closure in Hubei region and different regions. Some different nations are additionally starting
to feel an immediate effect as their specialists set up comparative measures. The lull in China
has impacts on exporters to China. China's biggest wellsprings of imports are Korea, Japan,
and other Asian nations, as per the World Bank4. Thus, even without new flare-ups of the
sickness, these zones will probably encounter moderate development in the principal half of
2020.

• Supply chain and market disturbance: Many assembling firms depend on imported
halfway contributions from China and different nations influenced by the sickness. Numerous
organizations likewise depend on deals in China to meet monetary objectives. The log jam in
monetary movement—and transportation limitations—in influenced nations will probably
3
Adnan Seric, “Managing COVID-19: How the pandemic disrupts global value chains”,27 Apr 2020
4
Yen Nee Lee, “the coronavirus impact on the global economy and markets so far”, CNBC,
(2020)

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affect the creation and gainfulness of explicit worldwide organizations, especially in
assembling and in crude materials utilized in assembling. For organizations that depend on
middle products from influenced districts, and that can only with significant effort switch
sourcing, the size of the effect may rely upon how rapidly the flare-up blurs. Little and
medium-sized firms may have more prominent trouble enduring the interruption.
Organizations attached to travel and the travel industry are confronting misfortunes that are
likely not recoverable.

• Financial sway on firms and budgetary business sectors: Brief disturbances of

sources of info or potentially creation may pressure a few firms, especially those with lacking
liquidity. Dealers in money related business sectors could conceivably effectively envision or
comprehend which firms may be defenceless. The subsequent ascent in danger may uncover
that at least one key money related market players have taken venture places that are
unbeneficial under current conditions, further debilitating trust in monetary instruments and
markets. A potential (likely low-likelihood)5 occasion would be a huge budgetary market
interruption as members become worried about counterparty hazard. A fairly more probable
chance is a critical decrease in value markets and corporate security markets, with speculators
wanting to hold government protections (especially US depositories) due to the vulnerability
made by the pandemic.

IMPACT OF COVID-19 ON THE INDIAN ECONOMY

The economic impact of the 2020 coronavirus pandemic in India has been largely disruptive.
India's growth in the fourth quarter of the fiscal year 2020 went down to 3.1% according to
the Ministry of Statistics. The Chief Economic Adviser to the Government of India said that
this drop is mainly due to the coronavirus pandemic effect on the Indian economy. Notably
India had also been witnessing a pre-pandemic slowdown, and according to the World Bank,
the current pandemic has "magnified pre-existing risks to India's economic outlook".
The World Bank and rating agencies had initially revised India's growth for FY2021 with the
lowest figures India has seen in three decades since India's economic liberalization in the
1990s.

5
Shikha Goyal, “What is the impact of Coronavirus on Indian Economy”, Jagran Josh, 23, (2020)

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Unemployment rose from 6.7% on 15 March to 26% on 19 April 6 and afterward withdraw to
pre-lockdown levels by mid-June. During the lockdown, an expected 14 crore (140 million)
individuals lost work while pay rates were cut for some others. Over 45% of families the
country over have detailed a pay drop when contrasted with the earlier year. The Indian
economy was relied upon to lose over ₹32,000 crore (US$4.5 billion) consistently during the
initial 21-days of complete lockdown, which was announced after the Covid flare-up. Under
complete lockdown, not exactly a fourth of India's $2.8 trillion monetary development was
utilitarian. Up to 53% of organizations in the nation were extended to be essentially
influenced. Gracefully chains have been put under worry with the lockdown limitations set
up; at first, there was an absence of lucidity in smoothing out what a "fundamental" is and
what isn't. Those in the casual segments and day by day wage bunches have been at the most
danger. Countless ranchers around the nation who develop perishables likewise confronted
vulnerability

Slowdown in demand & supply7

Covid has upset the interest and flexibly chain the nation over and with this disturbance, it
very well may be seen that the travel industry, friendliness, and flying parts are among the
most exceedingly awful influenced areas that are confronting the greatest effect of the current
emergency. Shutting of film theatres and declining footfall in shopping edifices has
influenced the retail part by affecting the utilization of both basic and optional things. As the
utilization of any item or administrations goes down, it prompts an effect on the workforce.
In the current situation, with all the retailers shutting down their administrations, the positions
of the representatives are at an enormous danger.

Suggestions on the workforce

Occupation misfortunes and compensation cuts are likely in the high-hazard administrations
division, including aircrafts, inns, shopping centers, multiplexes, cafés, and retailers, which
have seen a sharp fall popular because of lockdowns the nation over. On the off chance that
the current worldwide and homegrown monetary stoppage perseveres, it will affect request
and acknowledgment.

6
Sharma, Yogima Seth. "Unemployment rate falls to pre-lockdown level: CMIE". The Economic Times.
Retrieved 24 June 2020.
7
Abid Hasan,”Impact of COVID-19 on the Indian economy & workforce”,People Matters (2020)

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Without a doubt, with this emergency affecting the business around the nation, it will make
exceptionally testing circumstances for the workforce. Organizations are not meeting the
income targets consequently, compelling managers to chop down their workforce. The World
Travel and Tourism Council has anticipated 50 million the travel industry occupations getting
wiped out on account of the pandemic. The representatives of global organizations, however
day by day wage laborers have been affected the most during this emergency.
The International Labour Organization has called for earnest, enormous scope and composed
measures across three columns - securing laborers in the work environment, invigorating the
economy and business, and supporting positions and earnings.

Need for policy intervention

There is an urgent need to take instant steps to not only contain the spread of the virus, but
also to address the key pain areas of the industry which can help in minimising the impact of
the outbreak on the Indian economy and businesses 8. The Indian Government & RBI need to
support the Indian industry and economy at this juncture in different ways:
 Maintain liquidity at surplus levels and provide special liquidity support for any
companies / NBFCs / banks that come under strain due to intensifying risk aversion in
financial markets or due to large demand shock.
 Increase credit limits for all regular banking accounts by 25 percent across the board.
Also, Increase overdraft facility to state governments from the RBI. Pay the pending
GST compensation immediately.
 IBC to be suspended for a short period for the aviation and hospitality sectors as they
are the worst affected.
Since a large number of people will stand to lose their jobs especially in the retail, hospitality,
travel, construction sector, the government can consider giving incentives for employers to
keep the workers, while the coronavirus problem tides over.
On March 24th, 2020 the Finance Minister extended the filing dates of ITR, GST, linking of
PAN and Aadhar and other reliefs for the big and small enterprises. The finance ministry is
already working on an economic package to mitigate the impact of coronavirus on the Indian
economy.

8
Abid Hasan,”Impact of COVID-19 on the Indian economy & workforce”,People Matters (2020)

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The government is taking necessary steps that will not damage the economy further but the
damage that has been done in the previous few months will definitely last for a longer period
of time. As the country is locked down for the coming three weeks, India Inc has to stretch
themselves to sustain the situation and face the challenge. The Indian government has also
urged employers to not cut jobs and salaries. Many CEOs and management teams are taking
pay cuts to ensure their workforce does not have to bear the brunt.

SECTOR-WISE IMPACT ON INDIAN INDUSTRY

The impact of coronavirus pandemic on India has been largely disruptive in terms of
economic activity as well as a loss of human lives. Almost all the sectors have been adversely
affected as domestic demand and exports sharply plummeted with some notable exceptions
where high growth was observed9. An attempt is made to analyse the impact and possible
solutions for some key sectors.

Food & Agriculture:

Since agriculture is the backbone of the country and a part of the government announced
essential category, the impact is likely to be low on both primary agricultural production and
usage of agro-inputs. Several state governments have already allowed free movement of
fruits, vegetables, milk etc. Online food grocery platforms are heavily impacted due to
unclear restrictions on movements and stoppage of logistics vehicles. RBI and Finance
Minister announced measures will help the industry and the employees in the short term.
Insulating the rural food production areas in the coming weeks will hold a great answer to the
macro impact of COVID-19 on Indian food sector as well as larger economy.

Aviation & Tourism:

The contribution of the Aviation Sector and Tourism to our GDP stands at about 2.4% and
9.2% respectively. The Tourism sector served approximately 43 million people in FY 18-19.
Aviation and Tourism were the first industries that were hit significantly by the pandemic.
The common consensus seems to be that COVID will hit these industries harder than 9/11
and the Financial Crisis of 2008. These two industries have been dealing with severe cash
flow issues since the start of the pandemic and are staring at a potential 38 million lay-offs,
9
Rima Shretta, “The economic impact of COVID-19”, research.ox (2020)

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which translates to 70 per cent of the total workforce. The impact is going to fall on both,
White- and Blue-collar jobs. According to IATO estimates, these industries may incur losses
of about 85 billion Rupees due to travel restrictions. The Pandemic has also brought about a
wave of innovation in the fields of contactless boarding and travel technologies.

Telecom:
There has been a significant amount of changes in the telecom sector of India even before the
COVID 19 due to brief price wars between the service providers. Most essential services and
sectors have continued to run during the pandemic thanks to the implementation of the ‘work
from home’ due to restrictions. With over 1 billion connections as of 2019, the telecom sector
contributes about 6.5 per cent of GDP and employs almost 4 million people. Increased
broadband usage had a direct impact and resulted in pressure on the network. Demand has
been increased by about 10%.10 However, the Telco’s are bracing for a sharp drop in adding
new subscribers. As a policy recommendation, the government can aid the sector by relaxing
the regulatory compliances and provide moratorium for spectrum dues, which can be used for
network expansions by the companies.

Pharmaceuticals:
The pharmaceutical industry has been on the rise since the start of the Covid-19 pandemic,
especially in India, the largest producer of generic drugs globally. With a market size of $55
billion during the beginning of 2020, it has been surging in India, exporting
Hydroxychloroquine to the world, esp. to the US, UK, Canada, and the Middle-East.
There has been a recent rise in the prices of raw materials imported from China due to the
pandemic. Generic drugs are the most impacted due to heavy reliance on imports, disrupted
supply-chain, and labour unavailability in the industry, caused by social distancing.
Simultaneously, the pharmaceutical industry is struggling because of the government-
imposed bans on the export of critical drugs, equipment, and PPE kits to ensure sufficient
quantities for the country. The increasing demand for these drugs, coupled with hindered
accessibility is making things harder. Easing the financial stress on the pharmaceutical
companies, tax-relaxations, and addressing the labour force shortage could be the
differentiating factors in such a desperate time.

S. Mahendra Dev and Rajeswari Sengupta, “Covid-19: Impact on the Indian Economy”, IGIDR
10

publication(2020)

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Oil & Gas:
The Indian Oil & Gas industry is quite significant in the global context – it is the third-largest
energy consumer only behind USA and Chine and contributes to 5.2% of the global oil
demand. The complete lockdown across the country slowed down the demand of transport
fuels (accounting for 2/3rd demand in oil & gas sector) as auto & industrial manufacturing
declined and goods & passenger movement (both bulk & personal) fell. Though the crude
prices dipped in this period, the government increased the excise and special excise duty to
make up for the revenue loss, additionally, road cess was raised too. As a policy
recommendation, the government may think of passing on the benefits of decreased crude
prices to end consumers at retail outlets to stimulate demand.

Chemical Industry:
Some synthetic plants have been closed down in China. In this way, there will be limitations
on shipments/coordination’s. It was discovered that 20% of the creation has been affected
because of the interruption in crude material flexibly. China is a significant provider of
Indigo that is required for denim. Business in India is probably going to get influenced so
individuals making sure about their provisions. In any case, it is a chance. US and EU will
attempt to broaden their business sectors.

Automobile Industry:
Its effect on Indian organizations will change and rely on the degree of the business with
China. China's business no uncertainty is influenced. In any case, current degrees of the stock
appear to be adequate for the Indian business. In the event that the closure in China proceeds,
at that point it is required to bring about an 8-10% constriction of Indian vehicle producing in
2020.

Electronic Industry:
The significant provider is China in gadgets being an eventual outcome or crude material
utilized in the electronic business. India's electronic industry may confront gracefully
interruptions, creation, decrease sway on item costs because of substantial reliance on
hardware part flexibly legitimately or in a roundabout way and neighbourhood fabricating.

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Foreign Trade:
China has been India's biggest wellspring of imports since 2004-05, shows information from
the Centre for Monitoring Indian Economy (CMIE) data set. In 2018-19, the most recent time
frame for which yearly information is accessible, it had a portion of 13.7% in India's all out
imports. Any significant disturbance in the Chinese economy can upset these imports and
consequently both creation cycles and gracefully of shopper merchandise in India.

Impact on Poultry:
The poultry business in various pieces of the nation has been hit hard in the midst of bits of
gossip that the novel Covid can sent through utilization of chicken, the costs of which have
fallen impressively accordingly. around two crore individuals utilized in the poultry business
the nation over have been affected. Individuals were evading utilization of meat, fish,
chicken, and egg and so forth. Because of the fall popular, discount cost of chicken had
dropped by as much as 70%.

These are some major factor which have been directly affected by Covid 19 in terms of
economy.

GOVERNMENT ACTIONS

In India the life versus livelihood debate also played out, with the government first
announcing that life would be prioritized over livelihood, which later changed to an equal
importance being given to life and livelihood. 11 By mid-May the centre was keen to resume
economic activities, while the Chief Ministers had mixed reactions.

Atmanirbhar Bharat Abhiyan

On 12 May the Prime Minister, in a location to the country, said that the Covid emergency
ought to be viewed as a chance, laying accentuation on homegrown items and "financial
confidence", an Atmanirbhar Bharat (transl. Self-dependent India) through an Atmanirbhar
Bharat Abhiyan (transl. Self-dependent India Mission)12. The next day the Finance Minister
began spreading out the subtleties of the Prime Minister's vision which would proceed into
"Economic cost of lockdown is nothing compared to people's lives: PM Modi". Business Standard.
11

ANI. 14 April 2020. Retrieved 14 April 2020.

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the following barely any days. The Finance Minister expressed that the point was to "spike
development" and "confidence", including that, "confident India doesn't mean cutting off
from rest of the world". The law and IT serve, Ravi Shankar Prasad, likewise said that
independence does "not mean detaching endlessly from the world. Unfamiliar direct
speculation is welcome, innovation is welcome confident India means being a greater and
more significant aspect of the worldwide economy." Shashi Tharoor called the 'Independent
India Mission' a repackaged rendition of Make in India.

India's general monetary bundle was declared as ₹20 lakh crore (US$280 billion), 10% of
India's GDP. The bundle, however reported on 12 May by the Prime Minister, included past
government activities, including the RBI declarations

The monetary bundle comprised of a blend of changes, foundation building, backing to

focused on organizations and a specific measure of direct money uphold. The "insurance free
advances" that the bundle gave planned to "continue business movement and shield jobs”.
Changes in FDI strategy, privatization of the force part, opportune store commitment and
simplicity of working together measures were likewise reported. Land changes at the state
level which were not referenced in the financial bundle are additionally important for the
general changes.

Reports however expressed the financial bundle didn't address transient interest concerns,
which may thusly pull down the economy considerably more; with a large portion of the
declarations being identified with flexibly. While the monetary bundle was censured on
different fronts, it was additionally offered impartial to positive reactions on different fronts,
for example, for the vital alert the legislature appeared in its spending.

ECONOMIC SITUATION

In India up to 53%13 of businesses have specified a certain amount of impact of shutdowns

caused due to COVID-19 on operations, as per a FICCI survey in March. By 24 April the
unemployment rate had increased nearly 19% within a month, reaching 26% unemployment
across India, according to the 'Centre for Monitoring Indian Economy
12
Bhusnurmath, Mythili (4 May 2020). "View: How will the economic recovery shape up? Likely
scenarios". The Economic Times. Retrieved 6 June 2020..
13
Vyas, Mahesh (21 April 2020). "Unemployment rate touches 26%". Centre for Monitoring Indian
Economy (CMIE). Retrieved 24 April 2020.

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Around 140,000,000 (14 crores) Indians lost employment during the lockdown. More than
45% households across the nation reported an income drop as compared to the previous year

Pre-pandemic slowdown
India had additionally been seeing a pre-pandemic log jam. Indeed, even before the
pandemic, since FY 2018–19, India's development was falling, 8% in Q4 FY18 to 4.5% in
Q2 FY20.In January 2020 itself, a long time before India's lockdown or responses to the
pandemic, the International Monetary Fund decreased India's GDP gauges for 2019 and
furthermore diminished the 2020 GDP estimate. The 2016 Indian banknote demonetisation
and merchandise and ventures charge authorization in 2017 prompted serious consecutive
interruptions in the economy. On head of this there had been various financial emergencies,
for example, the Infrastructure Leasing and Financial Services emergency and government
conspire disappointments, for example, that of 'Make in India'. There was additionally a huge
"pay mash" for both provincial and metropolitan parts in the year preceding the lockdown.
State income and expenditure
State governments incurred huge losses to the extent of having to cut capital expenses as well
as government plans in the near future and finding alternate ways to pay salaries. The Delhi
government has fallen 90% short in tax collection as compared to 2019 and is planning to
take loans and raise taxes in certain sectors. Maharashtra put a hold on all new capital works
till March next year. spending under government development schemes has been reduced by
67% for the current fiscal.
Defence
The Department of Military Affairs led by the Chief of Defence Staff postponed all capital
acquisitions until the coronavirus pandemic recedes. No new major defence deals would be
made in the beginning of the financial year 2020–21. While the delivery of S-400 missile
systems won't be affected, the delivery of Rafael fighter jets was reported to maybe being
affected. However, on 24 March, France confirmed that there will be no delay in the delivery
of the 36 Rafael jets.

E-commerce
In the third week of March, Amazon announced that it would stop sale of non-essential items
in India so that it could focus on essential needs. Amazon followed the same strategy in Italy
and France. On 25 March, Walmart-owned Flipkart temporarily suspended some of its

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services on its e-commerce platform and would only be selling and distributing essentials.
Big Basket and Gofers also ran restricted services, facing disruptions due to the lockdown.

Manufacturing
Major companies in India such as Larsen and Toubro, Bharat Forge, UltraTech Cement,
Grasim Industries, the fashion and retail wing of Aditya Birla Group, Tata Motors and
Thermax temporarily suspended or significantly reduced operations in a number of
manufacturing facilities and factories across the country. iPhone producing companies in
India also suspended a majority of operations. Nearly all two-wheeler and four-wheeler
companies put a stop to production till further notice. Many companies have decided to
remain closed till at least 31 March such as Cummins which has temporarily shut its offices
across Maharashtra. Hindustan Unilever, ITC and Dabur India shut manufacturing facilities
except for factories producing essentials. Foxconn and Wistron Corp, iPhone producers,
suspended production following the 21-day lockdown orders.

Stock markets
Impact of COVID-19 on National Stock Exchange of India NIFTY 50 (1 Jan 2020 to 19 May
2020). "The NIFTY 50 is NSE's benchmark broad based stock market index for the Indian
equity market."
On 23 March 2020, stock markets in India post worst losses in history. SENSEX fell 4000
points (13.15%) and NSE NIFTY fell 1150 points (12.98%). However, on 25 March, one day
after a complete 21-day lock-down was announced by the Prime Minister, SENSEX posted
its biggest gains in 11 years, adding a value of ₹4.7 lakh crore (US$66 billion) crore for
investors. On 8 April, following positive indication from the Wall Street that the pandemic
may have reached its peak in the US, the stock markets in India rose steeply once again. By
29 April, Nifty held the 9500 mark.

ECONOMIC RECOVERY
In the start of May, Duvvuri Subbarao, a previous RBI lead representative, said that India
could anticipate a V-molded recuperation. A V-molded recuperation is the best result. Arthur
D. Little, a worldwide counselling firm, has recommended that India will most likely observe
a W-formed recuperation. Mythili Bhusnurmath writes in The Economic Times that U-
molded recuperation is the most probable followed by a L-formed recuperation. CRISIL boss

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business analyst says if things work out positively, that if the infection is contained, we can
expect a V-recuperation, else it will wind up as a U-recuperation14.

In the second seven day stretch of May; organizations began arrangements for restarting
tasks. A few organizations opened workplaces with the greatest allowed quality of 33% while
others adopted a more careful strategy of as low as five percent. The start of June saw
organizations further resumes and making arrangements to return. An examination by Elara
Securities Inc. discovered that five Indian states, Kerala, Punjab, Tamil Nadu, Haryana and
Karnataka, are contributing 27% to India's GDP as India rises up out of a complete lockdown.
By mid-June, joblessness levels were back to pre-lockdown levels. Online deals came to pre-
Coronavirus level deals by June end.[317] Hindustan Unilever enrolled pre-Coronavirus
levels in deals in late June. On 2 July 2020, The Times of India revealed that various
monetary markers, for example, the producers buying administrators' file, products
development, GST assortments, power utilization and rail cargo transport indicated
noteworthy improvement when contrasted with earlier months.

On 24 July 2020 Ajay Bhushan Pandey, the Finance Secretary of India, said that the "Indian
economy could restore sooner than we expect" while Tarun Bajaj, the Economic Affairs
Secretary said that he expects an angular recuperation. Limited irregular closures in July were
seen to adversely influence parts of the nation's monetary recuperation.

On 29 July 2020, the Cabinet of India passed the National Educational Policy 2020 pointed
toward fortifying the economy.

CONCLUSION
Covid-19 has posed an unprecedented challenge for world. Given the large size of the
population, the precarious situation of the economy, especially of the financial sector in the
pre-Covid-19 period, and the economy’s dependence on informal labour, lockdowns and
other social distancing measures are turning out to be hugely disruptive.

The pandemic has pushed the global economy into a recession, which means the economy
starts shrinking and growth stops. Further, an early analysis by IMF reveals that the
manufacturing output in many countries has gone done, which reflects a fall in external
14
Bhusnurmath, Mythili (4 May 2020). "View: How will the economic recovery shape up? Likely
scenarios". The Economic Times. Retrieved 6 June 2020.

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demand and growing expectations of a fall in domestic demand. The IMF’s estimate of the
global economy growing at -3 per cent in 2020 is an outcome “far worse” than the 2009
global financial crises. Economies such as the US, Japan, the UK, Germany, France, Italy
and Spain are expected to contract this year by 5.9, 5.2, 6.5, 7, 7.2, 9.1 and 8 per cent
respectively Beyond Covid-19: The New Normal, In view of the scale of disruption caused
by the pandemic, it is evident that the current downturn is fundamentally different from
recessions. The sudden shrinkage in demand & increased unemployment is going to alter the
business landscape. Adopting new principles like ‘shift towards localization, cash
conservation, supply chain resilience and innovation’ will help businesses in treading a new
path in this uncertain environment.

The central and state governments have recognized the challenge and have responded but this
response should be just the beginning. The eventual damage to the economy is likely to be
significantly worse than the current estimates. On the demand side, the government needs to
balance the income support required with the need to ensure the fiscal situation does not spin
out of control. The balance struck so far seems to be a reasonable one but the government
needs to find a greater scope for supporting the incomes of the poor. Involvement of the state
and local governments may also be crucial in the effective implementation of further fiscal
initiatives. Policy makers need to be prepared to scale up the response as the events unfold so
as to minimise the impact of the shock on both the formal and informal sectors and pave the
way for a sustained recovery. At the same time, they must ensure that the responses remain
enshrined in a rules-based framework and limit the exercise of discretion in order to avoid
long-term damage to the economy

BIBLIOGRAPHY

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 http://www.igidr.ac.in/pdf/publication/WP-2020-013.pdf
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 https://www.peoplematters.in/article/talent-management/impact-of-covid-19-on-the-
indian-economy-workforce-25114

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