Impact on Indian Economy for

COVID 19
 Index
 ANALYSIS AND INFERENCES STOCK MARKET
 TOURISM- How COVID 19 has effected Tourism.
 Aviation and Railways
 UNEMPLOYMENT RATE Due To COVID 19
 Impact on GDP Growth Rate
 Policy and Program Implications
 Conclusion
 Research methodology
 Reference
 ANALYSIS AND
INFERENCES STOCK
The 2020 Stock exchange Crash happened at a worldwide level starting on 20th February. The Nifty50, Sensex, Nasdaq Composite and S&P 500 Index all finished at record highs.

MARKET
From 24 to twenty-eight Stock markets saw their largest one week decline after the Financial Crisis 2008. On 9th March, Stock markets severed contractions mainly because of the
Coronavirus Pandemic and Oil price battle between Russia and OPEC Countries led by Asian nations. Foreign institutional investors seem to have turned optimistic on Indian
equities a minimum of for the nowadays. On the last trading day of the truncated week in Indian Stock exchange, FII were the online buyers. FIIs thought this can be the most
effective time to shop for the shares at the smallest amount possible price. That’s why they purchased shares worth of Rs 1737.62 crores on April 9 following Rs1943.41 crore and
Rs 741.77 crore of shopping for within the previous two consecutive sessions. Domestic Institutional Investors (DII) used the rally and sold shares worth Rs 466.02 crores. In fact,
FIIS are attempting to lift the market sentiments after the continual fall within the market. Markets were also driven by expectations of infections peaking in the worst affected
countries and expectations of more stimulus measures. The market has shown a multi-year lows hit on March 23, where the market recorded its largest single day fall of over 1500
points but both the indices have recovered more than 21 percent of losses each from those low points. Positive global cues helped bulls to fuel a massive short-covering rally on D-
Street. Foreign institutional investors who were net sellers in March and most part of April also turned net buyers in the last three sessions pouring over Rs 4,000 crores.
Expectations of further stimulus measures from the Government fall in new cases of COVID-19 within the United States likewise as Europe, and expectations of smart money
moving towards India post-MSCI rejoin helped the sentiment. "The benchmark indices are now ending on a positive note with the expectation of stimulus measures from the
Govt. Gaurav Garg, Head of Research at Capital Via Global Research Limited said “The number of COVID-19 cases in India is low compared to the other nations like US and
European countries like Italy, Spain where the amount of deaths is in thousands as compared to the opposite the hundreds in India, Although the government has announced
various relief measures to avoid wasting the economy, investors are still expecting a second stimulus package from the government which might be focused on MSMEs which is
the worst hit, On the macro front, inflation data will be eyed and a further stimulus from the govt. to spice up the economy or support the MSME sector will lift sentiments.
Markets usually fluctuate on the idea of stories starting how rapidly the Patients increasing of Coronavirus and any lifting of lockdown in India. In India, the worst affected sectors
are Aviation, Textiles, Clothing, Finance, Insurance, Banking and various MSMEs; the government is trying to supply each possible relief to these sectors. That’s the reason Stocks
prices of these sectors are worst affected and only NIFTY FMCG is showing upstream in stock prices. The Coronavirus crisis started in China and later spread during a thunderstorm
everywhere the globe. It’s not only impacting the developed countries, developing countries also came into the grip of this devastating incidence which not only created
fluctuations in financial markets but also made hampering impacts on real economies of developing countries. The current pandemic has grave implications for public health and
for the economy. So, a part of the solution surely lies within the severity of the pandemic, the apparent ease with which COVID-19 spreads, and also the non-negligible mortality
rate among those that contract the virus. Still, we predict this answer is extremely incomplete. Mortality rates experienced during the Spanish Flu offer a worst-case upper bound
on the potential mortality induced by COVID-19. Yet the Spanish Flu did not trigger even a small number of daily stock-market jumps.
 ANALYSIS AND
INFERENCES STOCK
MARKETHere we do the analysis of the marketplace for 3 months as we are able to
because the number of patients is a smaller amount within the world the stock
market didn’t react much thereto and it remained high within the months of
January and February but as Coronavirus started reaching to another nations as
well the stock market starts falling. On 23rd march, Market saw its biggest fall in
some unspecified time in the future during a decade. When the Worldwide
Global Financial Crisis occurred in 2008, the market reacted similarly and it took
time to get over that situation, same goes with the present scenario and
probably the market would start recovering soon. NSE, Dow Jones, NASDAQ and
every other exchange where stocks are traded facing the same level of
difficulties.
 TOURISM
COVID 19 has resulted in one of the severest downturns for the travel and tourism sector in India. Coming on back of a sluggish economy and subdued growth over the past few
years, the COVID 19 blow is widely expected to push the sector to the brink. The aviation and tourism sectors are directly impacted leading to a near collapse of the sector,
majorly owing to the cancellation of inbound Visas and stringent restrictions on domestic or international travel. With revenue streams drying up, companies will be forced to
restructure their workforce. Reduced working hours, work without pay, salary cuts and downsizing the workforce are expected to be the norm over the next three months. The
Coronavirus pandemic would adversely affect the Indian travel and tourism industry, especially with the government suspending all visas, with the economic impact being
assessed to run into thousands of crores of rupees. One of the worst crises ever to hit the Indian tourism industry impacting all its geographical segments - inbound, outbound
and domestic and almost all tourism verticals - leisure, adventure, heritage, cruise, corporate and other segments, the aftereffects would be very dull for the economy. The whole
tourism value chain across hotels, travel agents, tour operations, destinations, restaurants, family entertainment venues and air, land and sea transportation have been hit.
India’s travel and tourism industry is staring at large-scale job losses. It is believed that around 70 percent out of a total 5.5 crore workforce could get unemployed, which is
around 3.8 crore people. This effect of job losses and layoffs has already begun throughout the country.

The following chart shows the share of foreign tourists visiting India every year in different states of the country. Due to
the global pandemic, the people visiting India would reduce in large numbers hitting the revenues of all the states showing
a large downfall. Among all the states, Maharashtra being the most attractive place for foreign tourists will be the worst hit
as Maharashtra has the largest number of COVID-19 cases and deaths across the country. The tourism 14 business would
show a creeping bowl leading to unemployment and fall in revenues of the service providing Industries.
TOURISM
The above chart shows the domestic travel visits by people every year on an average. The purpose of people is to visit
their family members, visits for business purposes, student’s intra travel within the country, people serving their
religious beliefs in different religious places, exploring new heritage sites etc. Due to the Coronavirus, there will be
deep downfall in such visits even after lockdown and the great loss bearers would be Railways and Aviation Sector.
Also, the metro cities like Gurgaon, Mumbai, Hyderabad, Bengaluru and Pune etc. had a lot of labor and working
professionals which travel a lot to carry out the official arrangements. The period of lockdown had completely barred
them to do so and led to reduction in a lot of revenue through these working professionals and would further also
restrict their operations in the upcoming year
Some important Facts and Figures in context of India are as follows:
1. The Travel and Tourism industry's direct contribution to India's GDP in 2018 has been approximately $ 98 billion
(9.2% of GDP) and estimates are that by 2028 the contribution will reach $ 194.69 billion. (Statista)
2. The total contribution of this industry to India's GDP has been $ 247 billion in 2018 and $ 268.29 billion in 2019. At
the same time, it is also expected that the total contribution of this industry will increase to $ 512 billion per year by
2029.
3. The industry created 40.3 million jobs in India in 2016, which was the 2nd highest in terms of Total Employment. 4.
In 2019, this figure of jobs reaches 44 million (4.4 crore) (Direct and indirect) and India gets 3rd rank among 185
countries (In terms of travel and tourism's total contribution to GDPWTTC). It is also expected that this figure of jobs in
this sector will reach 52.3 million per year by 2028. (WTTC)
 Aviation and Railways
Due to complete lockdown in the nation, there have been great losses to the Aviation and Railways sector. Railways and the civil aviation sector are facing massive losses due to
the outbreak of novel Coronavirus. Aviation is among the worst-affected sectors amidst the Covid-19 crisis that has taken the scale of a pandemic. According to the International
Air Transport Association, airlines globally can lose in passenger revenues of up to $113 billion due to this crisis. Airfares have also come under pressure due to nearly 30 per
cent drop in bookings to virus-affected destinations. As a result, airfares to such destinations have fallen by 20-30 per cent. Domestic traffic growth is also gradually being
affected with domestic travelers postponing or cancelling their travel plans. Some companies have reported more than 30 per cent drop in domestic travel this summer
compared with last year. Airfare in the popular domestic routes has been reduced by 20-25 per cent and airfares are expected to remain subdued for the summer season as
well. Cash revenues of airline companies are running low and many are almost at the brink of bankruptcy. Moreover, the crisis could lead to loss of jobs and pay cuts. Some
airlines have asked many of their employees to go on leave without pay. Air Deccan has suspended operations and sent employees on unpaid leaves. The Indian Railways has
declared that 63 per cent of tickets in the railways have been cancelled due to the Coronavirus scare.
 UNEMPLOYMENT RATE Due To
COVID 19
India's unemployment rate could have moved to over 20% as the economy lost positions after an across the nation lockdown produced results in the most recent seven day
stretch of March, as per an overview by the Center for Monitoring Indian Economy Pvt. The unemployment rate was 23.4% for the week finished April 5 depending on the size of
9,429 observations, Mahesh Vyas, the CEO of CMIE, composed. The private part inquired about gathering depended on telephonic meetings in the wake of suspending their
ordinary overview in the most recent seven day stretch of March. For the entire month of March, CMIE evaluated the unemployment rate to be 8.7% contrasted and 7.8% in
February. This is the most noteworthy joblessness rate in 43 months, since September 2016.

“These yielded an unemployment rate of 23.4

percent during this week; an LPR of 36 percent
and an employment rate of 27.7 percent,”.
 Impact on GDP Growth Rate
While the COVID-19 pandemic is constantly growing and showing little signs of containment as of 15 April 2020, its adverse impact on economic growth of the country will
probably be very serious. The UN warned that the coronavirus pandemic is expected to have a significant adverse impact on global economy, and most significantly, GDP growth of
India for the present economy is projected to decline to 4.8 per cent (United Nation 2020). Similarly, the UN ‘Economic and Social Survey of Asia and the Pacific (ESCAP) 2020
reported that COVID-19 would have extensive socio-economic consequences in the region with inundate activities across borders in the areas of tourism, trade and financial
linkages (United Nations, 2020).
Economic Survey 2019–2020 had provided advance estimates for growth in real GDP during 2019– 2020 at 5.0 per cent, as depicted in Table 1, as compared to the growth rate of
6.8 per cent in 2018–2019. The nominal GDP is estimated at `204,400 billion in 2019–2020 with a growth of 7.5 per cent over the provisional estimates of GDP (`190,100 billion)
for 2018–2019. (Economic Survey, 2020, p. 100) On 28 February 2020, the National Statistical Office announced revised estimates of GDP growth, from 8 per cent to 7.1 per cent
in the first quarter, from 7 per cent to 6.2 per cent in the second quarter and from 6.6 per cent to 5.6 per cent in the third quarter. Goldman Sachs estimated the growth rate of
GDP at 1.6 per cent, declining by 400 basis points because of 21-day lockdown (Goldman Sachs, 2020). In case of a quick retraction of COVID-19 pandemic across the globe by
mid-May, KPMG India estimated India’s GDP growth in the range of 5.3 per cent to 5.7 per cent. In second scenario where India controls the virus spread but there is a significant
global recession, the growth may be between 4 per cent and 4.5 per cent. KPMG India in its report estimated India’s GDP growth rate falling below 3 per cent if the virus spreads
further in India and lockdown sees an extension (KPMG, 2020). Motilal Oswal research suggests that a single day of complete lockdown could shave off 14–19 basis points from
annual growth (Oswal, 2020). Barclays reported the cumulative shutdown cost to be around US$120 billion, or 4 per cent of GDP (Barclays, 2020). Mr. Yashwant Sinha, former
Finance Minister of India, estimated the cost of 21-day countrywide lockdown at 1 percentage point of GDP. The global recession and uncertainties of future might make a 2-
percentage point decline in growth rate (for 2020–2021) possible.
Impact on GDP Growth Rate
 Policy and Program
Implications
Fiscal and Monetary Measures
Coronavirus pandemic demands coordinated fiscal and monetary policy measures to deal with it. The fiscal measures include paying the healthcare bill raised by the pandemic.
Providing for masks, gloves, testing kits, personal protection equipment, ventilators, ICU beds, quarantine wards, medicines and other equipment would mean a huge increase in
healthcare spending. Public spending on healthcare in India is 1.1 per cent of GDP. It is likely to increase in the current fiscal year. The government has declared a relief package of
`1,700 billion, it will be used to make cash transfers to the poor and vulnerable sections of the society. The sectors that are affected the most, that is, MSMEs and the farms, will
be supported by another relief package which will be announced soon. Tourism and those sectors which are integrated with global supply chains will require support. Tax
revenues will also drop due to recession. Fiscal receipts could drop by at least 2 per cent of GDP. All these fiscal measures will increase fiscal deficit by 1–1.5 per cent, which is
currently at 3.2 per cent, as predicted by economists. The crisis emerging from the coronavirus spread will pull down investment and consumption demand. Conventionally, the
demand side components of GDP account for 72.1 per cent consumption, out of which government consumption is barely 11.9 per cent as depicted in Table 2. An anxiety-
induced reluctance to spend is the main threat to economic growth rate. The government will have to increase the spending in order to boost demand. Support to different
sectors will have to be given as a measure to boost investment demand. Repo Rate has been reduced by 75 basis points, as part of a loose monetary policy. The federal reserve
had cut its interest rate by 1 percentage point and decided to keep it in the range of 0–0.25 per cent in the USA. Monetary policy is less effective in dealing with a pandemic
because the problem is not liquidity alone. The disruption of economic activity and the uncertainty of future bring down the investment sentiment. An anxiety-induced frugality
among firms and investors wipes out the investment demand
 Conclusion
The spiraling and pervasive COVID-19 pandemic have distorted the world’s thriving economy in unpredictable and ambiguous terms. But it significantly indicated that the current
downturn seems primarily different from recessions of the past which had jolted the country’s economic order. Whereas the nations, conglomerates, corporations and
multinationals continue to understand the magnitude of the pandemic, it is undoubtedly the need of the hour to prepare for a future that is sustainable, structurally more viable
for living and working. While the unprecedented situation has caused a great damage to the economy, especially during periods of lockdown, the nation will have to work its way
through it, by introduction of fiscal measures. As the national government envisions, protection of both lives and livelihood is required. The economic activity must begin gradually
after screening of the labor force. Strict preventive measures should be implemented by the industry in order to safeguard the health of the workers. While policy and reforms
should be doled out by the government adequately to salvage the economy, the industry, civil societies and communities have an equal role in maintaining the equilibrium. The
norms of social distancing, avoiding or cancelling gatherings, and use of masks and sanitizers should be the way of life till we are able to eradicate the virus. During this time, the
economy is juxtaposed with social behavior of humankind, so the responsibility of bringing back economic action is not of government alone. The risk of a global recession due to
COVID-19 in 2020 and 2021 would be extremely high, as it has been observed globally that the shutdown of all economic activities—production, consumption and trade—to
control the spread of COVID-19 is imminent. The nature of shutdown is unique in case of COVID-19 due to a supply shock, a demand shock and a market shock. The recovery in
economy depends on the timings and magnitude of government support as well as the level of corporate debt and how the companies and markets cope with lower demand.
Government assistance to those most in need (largely constituted of unorganized sector, migrants and marginalized communities) is a critical measure to save many lives. However,
every crisis brings about a unique opportunity to rethink on the path undertaken for the development of a human being, community and society. The COVID-19 pandemic has a
clear message for the Indian economy to adopt sustainable developmental models, which are based on self-reliance, inclusive frameworks and are environment friendly.
 Research Methodology

This is combination of various economic research papers found online. The inform found has been compiled to a small
size for relevant information found from various sources.

Finding
Combining
Relevant
the relevent
Online information
information
Research from various
into a small
economic
size.
papers
 Reference
1. Research Gate Paper On: Impact of COVID-19 on Indian Economy
2. Journal.sagepub.com: Impact of corona virus on Indian economy
3. National Statical Office for statical data
4. Yahoo! for market study graphs
5. Ministry of tourism: Impact of COVID-19 on Indian tourism department
6. “WHO” - Historical report on past health epidemics
7. Wikipedia- How past epidemics have affected various economies in the world.
8. Economic burden of diseases- WHO
9. Jsort.org
 Conclusion
• I thank my teacher for giving such an wonderful opportunity to make an
assignment on such an important topic, this topic has helped me
understand the value of economic condition of the country due the global
health epidemic of COVID-19. This project has helped me learn of lot of
stuff about Indian economics has a whole.