12/28/2022 0 Comments After effects of covid![]() ![]() The World Bank and Asian Development Bank approved support to India to tackle the coronavirus pandemic. The next day the Reserve Bank of India also announced a number of measures which would make available ₹374,000 crore (US$47 billion) to the country's financial system. ![]() On 26 March a number of economic relief measures for the poor were announced totaling over ₹170,000 crore (US$21 billion). The Government of India announced a variety of measures to tackle the situation, from food security and extra funds for healthcare and for the states, to sector related incentives and tax deadline extensions. Blue highlight reflects COVID-19 period (taken to start from March 2020 as per first lockdown). Indices: S&P BSE 500 (January 2015 to November 2020). However, on 25 March, one day after a complete 21-day lockdown was announced by the Prime Minister, SENSEX and NIFTY posted their biggest gains in 11 years. Stock markets in India posted their worst losses in history on 23 March 2020. Fast-moving consumer goods companies in the country have significantly reduced operations and are focusing on essentials. Young startups have been impacted as funding has fallen. Major companies in India such as Larsen & Toubro, Bharat Forge, UltraTech Cement, Grasim Industries, Aditya Birla Group, BHEL and Tata Motors temporarily suspended or significantly reduced operations. ![]() A large number of farmers around the country who grow perishables also faced uncertainty. Those in the informal sectors and daily wage groups have been at the most risk. Supply chains have been put under stress with the lockdown restrictions in place initially, there was a lack of clarity in streamlining what an "essential" is and what is not. Up to 53% of businesses in the country were projected to be significantly affected. Under complete lockdown, less than a quarter of India's $2.8 trillion economic movement was functional. The Indian economy was expected to lose over ₹32,000 crore (US$4.0 billion) every day during the first 21-days of complete lockdown, which was declared following the coronavirus outbreak. More than 45% of households across the nation have reported an income drop as compared to the previous year. During the lockdown, an estimated 140 million (140 million) people lost employment while salaries were cut for many others. Unemployment rose from 6.7% on 15 March to 26% on 19 April and then back down to pre-lockdown levels by mid-June. By 13 September 2020 economic activity was nearly back to pre-lockdown. On 1 September 2020, the Ministry of Statistics released the GDP figures for Q1 (April to June) FY21, which showed a contraction of 24% as compared to the same period the year before.Īccording to Nomura India Business Resumption Index economic activity fell from 82.9 on 22 March to 44.7 on 26 April. The contraction will not be uniform, rather it will differ according to various parameters such as state and sector. ![]() State Bank of India research estimates a contraction of over 40% in the GDP in Q1. (The ratings of over 30 countries have been downgraded during this period.) On 26 May, CRISIL announced that this will perhaps be India's worst recession since independence. However, after the announcement of the economic package in mid-May, India's GDP estimates were downgraded even more to negative figures, signalling a deep recession. The World Bank and rating agencies had initially revised India's growth for FY2021 with the lowest figures India has seen in three decades since India's economic liberalization in the 1990s. Notably, India had also been witnessing a pre-pandemic slowdown, and according to the World Bank, the current pandemic has "magnified pre-existing risks to India's economic outlook". The Chief Economic Adviser to the Government of India said that this drop is mainly due to the coronavirus pandemic effect on the Indian economy. India's growth in the fourth quarter of the fiscal year 2020 went down to 3.1% according to the Ministry of Statistics. The economic impact of the COVID-19 pandemic in India has been largely disruptive. Largest GDP contraction ever in Q2 (April–June) FY2020–2021 at −24%.Map showing real GDP growth rates in 2020, as projected by the IMF.ĬOVID-19 pandemic-induced market instability and lockdown ![]()
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