IMPACT ON INDIAN ECONOMY DUE TO COVID-19

By-Aaditya Sinha

Have you ever wondered how this world functions? It can be a very complicated question, but the answer rather is very simplistic in nature. The world functions by the business. The reason is that every human wants fulfillment of basic needs to live a life, i.e. Food, Shelter, Clothes, and for that everyone needs to have money.

So, money is that medium that exchanges two or more commodities. It is quite evident that money is the basic thing which everyone has to have.

Hence, it is quite important that we should talk about the economy of our country because the policies which our government makes are actually going to be the key in order to get a job for all of us.

In earlier days, the condition of our economy was our critical but in the time of the COVID-19 pandemic, the situations have worsened. However, before diving a deep dive, in order to understand the situation of our economy, let us try to understand the basics of the economy.

The idea of Economy and its Parameters

If we classify economics, then we can classify it in two main broader subjects which are Microeconomics and Macroeconomics. The former one talks about the economy at the individual level and the latter talks about the economy on a “national level”.

The meaning of the economy of a country actually punctuates “How many goods have been consumed and produced” The main parameter to judge any country’s economy is GDP which is also known as Gross Domestic Product. 

If we define GDP, it is actually the total market value of all the finished goods and services produced within the country’s borders in a specific time period”.

Without complicating the concepts even further let me give a very basic example. Suppose there is a local businessman who manufactures “Study Tables”. The cost of one study table is said to be Rs. 1500. If he is making 250 Study tables and he sells the commodity to the purchaser in Rs. 3,75,000, i.e. 3 lakhs 75 thousand rupees, now this is the GDP generated by this manufacturer and it is his little contribution to the Indian economy.

This will be calculated in India’s GDP in a specific year because he is the local manufacturer. If we purchase commodities from foreign countries then it will constitute their economy. Now I hope you actually understood what “Atma-Nirbhar Bharat means” because these days’ people just want to contribute to the meme world by just making memes about everything and anything.

The reason why our Hon’ble Prime minister gave a slogan of “Vocal for local” is that if we will purchase things from the local manufacturer then we will eventually increase our GDP. GDP is mainly decided by three sectors which are: Agriculture, Industry, and Service.

Effect on Indian Economy due to COVID-19 Pandemic

In a country like India where over 70% of the rural population depends upon Agriculture and it also constitutes roughly 17% of share in the GDP, it was evident that imposing a lockdown would actually have a gigantic amount of effect on the people and their income structure.

However, it was that grueling situation where one was bound to take a tough decision. Everyone in April thought that it is 21 days of lockdown and maybe things will be fine, however, forget 21 days, it is roughly 180 days, and the graph of cases because of COVID-19 is only increasing.

It is that situation now where people have to go on their jobs even after risking their lives. The economy was bound to shrink a bit, and it was happening all over the world. According to the Ministry of Statistics, India’s growth in the fourth quarter of the fiscal year decreased to 3.1%.

World Bank also said that India also suffered from the pre-pandemic slowdown, which is to indicate that the economy of our country was already suffering. The shocking number revealed that during the first lockdown in the month end of March and beginning of April, the Indian economy was expected to lose 32,000 crores (4.5 Billion $) each day. Roughly 14 crore people have lost their jobs and many people also suffered as their salary was reduced.

The thing is that I can go on to write each and every stats of the economy, but that is not going to work for the normal Indian citizens. I mean, there is “Ministry of Economics”, “Ministry of Finance”, Ministry of statistics” which are directly analyzing the statistical aspects, there are many talented bureaucrats in these ministries.

The problem is that because of the internet and AI techniques, already the low skill jobs were losing. Who hires a tourist guide nowadays; everyone has access to Alexa or Siri to give information about the place.

How many people book Auto-Rickshaws these days, because we have Ola, Uber, Rapido, and whatnot. So, the low skill jobs were already suffering and in the pandemic, their situations have worsened.

The revival of Economy

However, one has to be optimistic and try to think about the revival of our economy, in order to do that “Atma-nirbhar Bharat” is a very good proposal. If we Indians can actually try to purchase commodities from the local manufacturer rather than business giants, then only we can improve our GDP.

However it is not going to be easy, because there are many commodities which we are bound to purchase from big giants, and also many of our Indian companies like PayTM also have huge investments from China.

The thing is that people have to understand that there is a thin line between being “responsible and Careless” because COVID-19 is still there, but people have to leave for their job and now that is the only option we have.

However, people who can do their work from their home should be in-home, because if cases will increase then the condition will worsen.

People need to begin their work and think that the situation is still normal, the only change is that we have to wear a mask or maybe gloves in certain cases and we have to maintain social distancing, perhaps this is the “new normal” and evolution in itself.

Conclusion

The concept is clear, the situation is extremely critical and since cases due to COVID-19 are only increasing and there is no clear picture when we will get our “first official COVID-19 vaccine”, till then we have to pretend that nothing has changed, and we should go to our work like that.

However, those works which can be done from their home without affecting economy should not be opened, for example, colleges which can operate their classes online, need not be opened soon, because the students are already paying the fees and the teacher are getting their salary, so there is no harm in the economy.

However there would be surely a loss to everyone in this time, but as I said even that loss is a part of this “New Normal”.


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