Impact of the present crises

on India Economy

Dr. Shrinivas R. Patil

Director, IEMS B-School Hubli
 1. Introduction

• The present crises is more dangerous than

world war
• World GDP is expected to come down by 10%
• Future of the world

Dr. Shrinivas R. Patil - Director IEMS Hubli

9900409419
 2. Impact on Economy

– IMF – projects India’s GDP for 2021-22 is

1.9% highest among G-20 Nations
– The loss of over Rs.32,000 crore occurred
every day during the lockdown period

• Source: : CMIE

Dr. Shrinivas R. Patil - Director IEMS Hubli

9900409419
 3. Impact on Economy

• Unemployment rose from 6.7% on 15th March

to 26% on 19th April, 2020.
• It is estimated 14 crore people have lost jobs
• Banks NPA

Dr. Shrinivas R. Patil - Director IEMS Hubli

9900409419
 4. AREAS MOST AFFECTED..

• Raw material and Spare Parts:

– Majority of the raw materials are imported from other countries.
Around 55% of hardware imported from China
• Financial Services
– Redemptions of funds
– The worst hit on 23 March 2020 & biggest gain on 25 March,
2020 in 11 years in stock market.
– NPA

Dr. Shrinivas R. Patil - Director IEMS Hubli

9900409419
 5. AREAS MOST AFFECTED..

• Hospitality
– Estimated loss to the tourism industry is Rs.15,000 crore for March
and April alone. 

• Aviation
– Revenue loss of $11.2 bln. Job risk 29%
– Passengers demand fallen by 47%.
– Almost 600 universal flights to and from India
were dropped for differing periods.
Dr. Shrinivas R. Patil - Director IEMS Hubli
9900409419
 6. AREAS MOST AFFECTED..

• Supply chains and logistics

"If even one link in the supply chain is broken, the
country could run out of stocks of packaged food
in the next 7-10 days."
• E-commerce
Online shopping

Dr. Shrinivas R. Patil - Director IEMS Hubli

9900409419
 7. AREAS MOST AFFECTED..

• Real Estate
– Sales fell by 26% in Q4 and 51% drop in lockdown
– New projects drop down by 27%
• Government Revenue
– Shortfall in revenue & Delay in Tax Collection
– Spending increased
– Decreased / avoided cost

Dr. Shrinivas R. Patil - Director IEMS Hubli

9900409419
 8. AREAS MOST AFFECTED..
• Oil Industry
– Fuel demand in April 2020 fell nearly 46% .
– Annual fuel consumption will decline by 5.6% in
2020.
– Diesel demand will drop by 6%.
– 80% of Solar modules from China
– Renting out reserve space

Dr. Shrinivas R. Patil - Director IEMS Hubli

9900409419
 9. Unemployment

• 27 mln people btwn age group 20 to 30 yrs lost

their job
• Unemployment rate from 7.6% to 27% as on
May 3rd and is expected to reach 35% by June,
Hence 136 mln jobs may be lost
• Hospitality and Exports sectors are badly
effected
• Source: CMIE -Centre for Monitoring of Indian Economy

Dr. Shrinivas R. Patil - Director IEMS Hubli

9900409419
 10. Opportunities to India

• Companies relocating from china to other

countries
• Compounded by price war in oil producing
nations
• Mergers, Acquisitions
• Indian leadership

Dr. Shrinivas R. Patil - Director IEMS Hubli

9900409419
 11. Sectors may soon grow:

• Agriculture
• Telecom sector
• Gold Market
• Oil Industry
• Financial Service – Stock Market
• FMCG, Pharma, Hospital

Dr. Shrinivas R. Patil - Director IEMS Hubli

9900409419
 12. Government Initiations

• PSB sanctioned 6000 crore from May 10 to 20

and 6.45 Lakh crore during entire lock down
period.
• Decreased Repo Rate
• Minimize imports of costly defense items and
encourage domestic production
• Rs. 50,000 crore special finance to NABARD,
SIDBI and NHB.
• 20 Lakh Crore Package….
Dr. Shrinivas R. Patil - Director IEMS Hubli
9900409419
 13. Is India an alternative to China
?

• Foreign Companies in China are switching to

other directions
• Bilateral talks are being done
• The PMO conveyed state to have Land Bank
• Pro Industry Strategies
• 4,61,589 hectares land is earmarked for the
purpose (Economic Times).
Dr. Shrinivas R. Patil - Director IEMS Hubli
9900409419
 14. To Overcome….

• Government to refund Income Tax to tax payers and GST

to states & Uts asap
• Govt to spend more amount on infrastructure in the
days to come
• Reduce government charges to Individuals, Schools,
Colleges and Companies wrt registration , affiliation, ESI,
PF etc.
• Avoid unproductive & unnecessary expenses
• Reduce or postpone your spendings
Dr. Shrinivas R. Patil - Director IEMS Hubli
9900409419
• भारत माता की जय

Dr. Shrinivas R. Patil - Director IEMS Hubli

9900409419