The outbreak of Covid-19 has impacted not only India but has made the world standstill since early 2020. India witnessed a nationwide lockdown which affected social and economic life enormously. The country has fallen silent and has caused severe disruption on Indian economy.
The pandemic has revealed many loopholes in our nationwide system. The lockdown has resulted in millions of job losses and pay-cuts which have directly impacted the purchasing power of the consumer. The deadly virus has disrupted major sectors like aviation, tourism, retail, capital market, MSME’s to name a few. International trade is on stake from last year.
The percent of revenue generated by travel and tourism is added to a country’s GDP. It is estimated that the situation caused due to covid-19 could lead to a four percent of permanent loss to the GDP of India and it could the lowest GDP, the country might unleash.
When the people across the country started to normalize the previous routine, the picture across the country changed drastically in 2021, the second wave of novel corona virus in India is grim. The virus has entered our homes, our neighborhoods. People close to us are dying, every minute.
The lockdown situation this year is again impacting mass losses. Less money means spending only i.e. spending only on essentials that needed for livelihood, resulting in historical slowdowns. The market across the globe is downsizing their imports which will directly impact to India’s export system.
As the breakout continues to grim the world might witness recession in coming years. The economy of India is showing a downward trend in comparison to previous fiscal years. The Indian economy was absorbing the changes led by demonetization and GST implementation and was making its mark in the global market but the covid-19 outbreak has pushed Indian market backward. The value of Indian rupee is marking all-time low with each day against USD, which is leading to unprecedented situation in India for settling their dues in USD.
The current lockdown declared and implemented in every state will have a long-lasting effect especially in the informal sector. The lockdown is somehow successful in breaking the chain of the virus but the anticipation of its comeback is higher once the lockdown is removed. The damage caused can only be estimated once the economy is ready to move again.
Majorly, it will depend on how the Government of India will respond to the upcoming challenges. The government will have to readjust financial policies to uplift the market and to ensure that there is balance in social, political and economic reforms.
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