Professional Documents
Culture Documents
India
Impacts on Production, Poverty & Food Systems
1 Preview of Results
Lockdown Imposes Heavy Economic Costs
• India’s GDP is estimated to have Economic impacts during 9-week
lockdown period
fallen by 30% during the country’s (changes are relative to a no-COVID
9-week lockdown scenario)
Percentage decline
(compared to a no-COVID scenario) in national GDP
30.3
Q1 Q2 Q3
• But economic losses remain, Q4
Change in
even with a faster easing
-1%
-5%
-6%
quarterly -2% -2%
2
COVID-19 Cases & Policy Timeline
The Ministry of Home Affairs
and the Government of India
The Prime Minister ordered further extended the lockdown Night curfews policy was
a nationwide lockdown policy removed. Gym and Yoga
restriction for 21 days facilities allowed to open but,
schools still closed
The Prime Minister
declared a COVID relief
package of INR 20
All domestic and Trillion ($US 273 billion)
international travel was
automatically suspended
120,000
100,000
new cases
80,000
60,000
40,000
Confirmed
20,000
0
14-
24-
19-May
29-May
3-Jul
8-Jul
29-Feb
3-Jun
8-Jun
18-Jun
28-Jun
11-Sep
21-Sep
10-Mar
20-Mar
12-Aug
22-Aug
15-
25-
13-
23-
17-
27-
Aug 1-
Sep 6-
16-
26-
Sep 1-
9-May
19-Feb
24-Feb
30-Mar
Oct 6-
14-Feb
30-Jan
25-Jan
28-Jul
13-Jul
18-Jul
23-Jul
Sep
5-Mar
9-Apr
4-May
May
May
Jun
Jun
Sep
4-Apr
14-Apr
24-Apr
29-Apr
2-Aug
7-Aug
Aug
Mar
Mar
19-Apr
4-Feb
9-Feb
Hotels & food • Hotels, restaurant, cafés, bars closed apart from take-away foods
services • Limited delivery options for food or other products High
Sectors Affected by Lockdown Policies (2)
Sector Lockdown restrictions or exemptions in targeted regions Directly Affected?
Professional & • Almost all closed or teleworking (e.g., legal, accounting services)
business services • Activities involving in-person field visits affected (e.g., engineering) Minimal
Public admin & • Public services & agencies remain open, but most staff teleworking
law enforcement • Police & security services exempted (essential) Minimal
Education services • All public schools closed without much scope for online delivery Some
• All private schools closed with some online materials
Government Nationwide
revenues • Fall in tax revenues due to decline in economic activity Some
• Agriculture
• Export demand
• Mining & crude oil
• Remittances & migration
• Manufacturing
• Foreign direct investments
• Utilities (energy, water)
• Construction Indirect
• Whole & retail trade services
• Transportation, storage & cargo
• Hotels & food services impacts
• Banking, finance & insurance
• Professional & business services
• Public administration & law enforcement
• Education services
• Health & social services
• Sports & entertainment Economywide
• Community & other services
Impacts
GDP | jobs
Incomes | poverty
Key Assumptions
• Lockdown period
• Government introduced national holiday for 9 consecutive weeks
(25 March to 31 May)
• 1-week lockdown period imposed in Q1 (January-March) while the
remaining 8-week imposed in Q2 (April-June)*
• Assumptions
• All shocks are imposed nationwide given the broad scope of the
government’s lockdown directive
• Shocks are weighted by importance of Q2-2020 for sectoral
GDP
35%
30%
25%
20%
15%
10%
5%
0%
Total GDP Crude oil Crops Food processing Hotels & food services
Q1 Q2 Q3 Q4
* January-March is the fourth quarters of the government’s fiscal year (April-March)
Scenarios
1• Impacts during 9-week lockdown period (26 March to 30 May)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Q1 Q2 Q3 Q4
2 3
Economic Impacts During the
Lockdown Period
4
GDP Losses During Lockdown
National GDP drops 30% during the 9-week lockdown
(most economic losses occur in the industry & services sectors)
-$54.2
-$80.5
-30.3% -31.4%
-42.0% -$135.1
Closing schools has modest Closing all schools in the country 2.1%
negative GDP impacts
Closing hotels, bars and restaurants 2.1%
Remittances is important for household
incomes & consumption spending, Falling foreign remittances 0.9%
which indirectly affects GDP
Source: India SAM Multiplier Results
Impacts on the Agri-Food System
The largest impact from lock-down policy mainly hit food services,
while food supply is exempt from most restrictions
(food services are directly affected by the closing of hotels, restaurants & bars)
Falling remittances are also more Domestic workers & other services 1.1%
important for the food system
because households spend a large Banning sports & other entertainment 0.9%
share of their incomes on food
Closing all schools in the country 0.5%
1% Sugarcane (3.5%)
-1% Livestock
Beverages & sugar refining badly affected by -2% Sugar refining (2.3%)
-12%
-23%
-25%
-29% -30%
-34% -33%
Source: India SAM Multiplier Results
Poverty Impacts During the Lockdown
National poverty rate increases by 22%-points during the
lockdown period (≈ 295 mil. more poor people)
(poverty rate is the share of the population with
consumption spending below the national poverty line)
210.5
21.9%
21.8% 84.9
5
Recent Data | Changing Mobility
People’s movements suggest a slow “return to normal” activities
(changes in mobility relative to Jan-Feb activity)
40.0
Percent change from normal activity (Jan to mid Feb)
20.0
retail and
recreation
0.0
grocery and
pharmacy
-20.0 parks
transit stations
-40.0
workplaces
-60.0
residential
-80.0
-100.0
W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4
Feb Mar Apr May Jun Jul Aug Sep
Jan levels
No lockdown restrictions or global shocks in this “pre-COVID-19” period
Q1 Feb
Mar
9-week lockdown (last week of March until end of May)
Apr Global shocks start in late-March
Q2 May
Jun Losses reduced by 50% Losses reduced by 10%
Jul
Q3 Aug Losses reduced by 90% Losses reduced by 50%
Sep
Oct
Q4 Nov Losses reduced by 99% Losses reduced by 90%
Dec
GDP Impacts with Recovery Scenarios
National GDP is 9-13% lower over 2020 as a result of COVID-19
(given pre-COVID-19 growth trends, India may well lose more than a year of growth)
-13.2%
-16.3%
-18.7%
-26.4%
-28.1%
-30.3% -29.6%
200
150
100
US$ billions
10.2%
3.8%
2.7%
1.4%
0.6%
Q1 Q2 Q3 Q4
Quarterly averages
A
Channels, Shocks & Affected Sectors (1)
Type of restriction or Major sectors Geography Size of shock Detailed subsectors affected by shock2
global shock affected2 affected1
Direct restrictions on Agriculture National 0% Crop/animal production, hunting, related service activities (D01); forestry, logging (D02);
farming (A) fishing, aquaculture (D03)
Limiting mining Mining, quarrying National 0% Coal, lignite (D5); crude petroleum, natural gas (D06); metal ores (D07); quarrying (D08);
operations (B) mining support service activities (D09)
Closing non-essential Manufacturing National -20% Food products (D10); beverages, tobacco (D11-12); coke, refined petroleum (D19);
manufacturing (C) pharmaceuticals, medicinal chemicals (D21); non-metallic minerals (D23); electromedical
operations equipment (G266)
National -50% Textiles, clothing, leather (D13-15); wood, paper, printing (D16-18); Chemicals, rubber,
plastics (D20-21)
National -45% Metals (D24-25); equipment, machinery (D26-28 excl. G266); vehicles, transport
equipment (D29-30); furniture (D31), other manufactures (D33)
Disruptions to energy Electricity, gas (D); National 0% Electricity, gas, steam supply (D35); water collection, treatment, supply (D36); sewerage,
and water supply water supply (E) waste collection/remediation (D37-39)
Limiting construction Construction National -50% Construction of buildings (D41); civil engineering (D42); specialized construction activities
activities (F) (D43)
Closing non-essential Wholesale/retail National -50% Agricultural raw materials, live animals (G462); agricultural machinery, equipment,
trading activities trade (G) supplies (C4653); food, beverages, tobacco, incl. stalls & markets (G463 G471-472 C4781)
National -50% Motor vehicle trade/repair (D45); wholesale trade (D46 excl. G462-463 C4653 C4663);
retail trade (D47 excl. G471-472 G47 C4781); construction materials, hardware, plumbing,
heating equipment (C4663); automotive fuels (G473)
Transport/travel Transportation, National -50% Postal/courier activities (D53); Freight rail/road/air transport (C4912 C4923 G512);
restrictions storage (H) transport via pipeline (G493); transport support (G522); warehousing/storage (G521)
National -50% Sea/coastal/inland water transport (C5011-5012 C5022); Urban/suburban
passenger/other land transport (C4911 C4921-4922)
National -50% Passenger air transport (G511)
Government work-from- Public National 0% Public administration, defense, compulsory social security (D84)
home orders administration,
defense (O)
Closing hotels, bars and Accommodation, National -30% Accommodation (D55); food/beverage service activities (D56)
restaurants food services (I)
Channels, Shocks & Affected Sectors (2)
Type of restriction or Major sectors Geography Size of Detailed subsectors affected by shock2
global shock affected2 affected1 shock
Closing non-essential Information, National -15% Publishing activities (D58); programming/broadcasting activities (D60);
business services communication telecommunications (D61); computer programming/consultancy activities (D62);
(J); finance, information service activities (D63); financial services, insurance, pension funding, auxiliary
insurance (K); real services (D64-66); real estate activities (D68); security and investigation activities (D80);
estate (L); accounting, bookkeeping, auditing, tax consultancy (G692); head offices, management
professional/ consultancy (D70); scientific research/development (D72); advertising, market research
scientific/technica (D73); other professional/scientific/technical activities (D74); legal activities (G692);
l activities (M); architectural/engineering activities (D71); veterinary activities (D75); motion
administrative/ picture/video/television program production, etc. (D59); renting/leasing activities (D77);
support services employment activities (D78); travel agencies, tour operators (D79); building services,
(N) landscape activities (D81); office administrative, office support, other business support
activities (D82)
Closing schools Education (P) National -10% Pre-primary and primary education (G851); secondary education (G852); higher education
(G853); other education (G854); educational support activities (G855)
Disruptions to hospitals Human health, National 0% Human health activities (D86); residential care activities (D87); social work activities
and clinics social work (Q) without accommodation (D88)
Banning sports & other Arts, recreation, National -40% Creative/arts/entertainment activities (D90); libraries, archives, museums, other cultural
entertainment entertainment (R) activities (D91); gambling, betting activities (D92); sports, amusement/recreation activities
(D93)
Domestic workers & Other service National -40% Membership organizations (D94); repairing computers & personal/household goods (D95);
other services activities (S); other personal services (D96); domestic workers/personnel (D97); other production
households as activities of private households for own use (D98); extraterritorial organizations/bodies
employers (T); (D99)
extraterritorial
organizations (U)
Note: (1) Channels, shocks, and affected sector in India are nationwide; (2) The magnitude of negative shocks on certain sectors is measured based on
daily people movement trend overtime according to their location collected by GOOGLE *. (3) numbers in parentheses are International Standard
Industrial Classification (ISIC Revision 4) codes (by major section with detailed subsectors, D is division, G is group and C is class).
*Source: https://www.google.com/covid19/mobility/
THANKYOU
◦ SUBJECT NAME – MANAGERIAL ECONOMICS
◦ PRESENTED BY :
◦ AGRIM MATHUR – 2K22/UMBA/14
◦ MEGHA GOYAL – 2K22/UMBA/42
◦ NIKITA SONI – 2K22/UMBA/46
◦ SUNNY KALRA- 2K22/UMBA/72