Department Of Business

And Industrial Management

SUBJECT : Business environment

CLASS: F.Y .M.B.A

SEMESTER : 2

ACADEMIC YEAR : 2020-2021

Topic: The economics of dealing with a
lockdown

presented by
Pastagiya Neha Manishkumar
Pandit Dhruv Maheshbhai
Sarvaiya Vikas Rameshbhai
Rana Amankumar Balwantbhai
Rathod Kamal Kishor
Introduction
The world has changed dramatically by coronavirus A
rare disaster , a coronavirus pandemic ,has resulted in
a tragically large number of human lives being lost. As
countries implement necessary Quarantines and social
distancing to contain pandemic , the world has put in a
great lockdown
The Economic Impact of COVID 19 with
special reference to India

1 Demand Side Impact

2 Impact on Financial Market
3 Supply Side Impact
4 Impact on International Trade
1. Demand side impact
* Tourism, Hospitality and Aviation are among
the worst affected sectors that are facing the
maximum brunt of the present crisis.
Closing of cinema theatres.

* Declining footfall in shopping complexes has

affected the retail sector by impacting
consumption of both essential and
discretionary items.
2. Impact on Financial Market
Greater uncertainty about the future
course and repercussion of Covid-19 has
also made the financial market extremely
volatile, leading to huge crashes and
wealth erosion, which in turn is impacting
consumption levels
3. Supply Side Impact
On the supply side, shutdown of factories and the resulting
delay in supply of goods from China has affected many Indian
manufacturing sectors which source their intermediate and final
product requirements from China. Some sectors like
automobiles, pharmaceuticals, electronics, chemical products
etc. are facing an imminent raw material and component
shortage.
 4. Impact on International Trade
China has been a major market for many Indian products like sea food,
petrochemicals, gems and jewellery etc. The outbreak of coronavirus has
adversely impacted exports of these items to China. For instance, the fisheries
sector is anticipated to incur a loss of more than Rs 1,300 crore due to fall in
exports. Similarly, India exports 36% of its diamonds to China.
Impact of COVID 19 on Indian Economy
The countrywide lockdown has brought nearly all economic
activities to an abrupt halt. Though, the supply of essential
commodities including medicine has been ensured
uninterrupted by the government. The disruption of demand
and supply forces are likely to continue even after the lockdown
is lifted. It will take time for the economy to return to a normal
state and even then social distancing measures will continue for
as long as the health shock plays out. Hence demand is unlikely
to get restored in the next several months, especially demand for
non-essential goods and services. There is likelihood that the
three major components of aggregate demand - consumption,
investment, and exports are likely to stay subdued for a
prolonged period of time.
In addition to the unprecedented collapse in demand, there will
also be widespread supply chain disruptions due to the
unavailability of raw materials, exodus of millions of migrant
workers from urban areas, slowing global trade, and shipment
and travel related restrictions imposed by nearly all affected
countries. The supply chains are unlikely to normalise for some
time to come. The longer the crisis lasts, the more difficult it will
be for firms to stay afloat. This will negatively affect production
in almost all domestic industries. This may further affect the
investment, employment, income and consumption, pulling
down the aggregate growth rate of the economy.
 COVID-19: Stimulating the economy and
employment
• The continued sharp decline in working hours globally due to
the COVID-19 outbreak means that 1.6 billion workers in the
informal economy – that is nearly half of the global workforce
– stand in immediate danger of having their livelihoods
destroyed, warns the International Labour Organization.
• The continued sharp decline in working hours globally due to
the COVID-19 outbreak means that 1.6 billion workers in the
informal economy – that is nearly half of the global workforce
– stand in immediate danger of having their livelihoods
destroyed, warns the International Labour Organization.
a) Informal economy impact

As a result of the economic crisis created by the

pandemic, almost 1.6 billion informal economy
workers (representing the most vulnerable in the
labour market), out of a worldwide total of two
billion and a global workforce of 3.3 billion, have
suffered massive damage to their capacity to earn a
living. This is due to lockdown measures and/or
because they work in the hardest-hit sectors.
IMPACT ON EMPLOYEEMENT
Without alternative income sources, these
workers and their families will have no
means to survive.
 b) Enterprises at risk
The proportion of workers living in countries under
recommended or required workplace closures has
decreased from 81 to 68 per cent over the last two
weeks
Worldwide, more than 436 million enterprises face
high risks of serious disruption. These enterprises are
operating in the hardest-hit economic sectors,
including some 232 million in wholesale and retail, 111
million in manufacturing, 51 million in accommodation
and food services, and 42 million in real estate and
other business activities.
Thank you