Date: 2020-04-26

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Impact of Covid-19 on the Indian Economy in the Short Run and the Long Run How bad is Covid-19 hurting the Indian Economy as a
whole? Overview of COVID-19 and Economic Impact COVID-19 Corona Virus Disease 2019 commonly known as Corona. It is a well-
known term nowadays and has put the word in fearful pressure. There is tremendous terror among the peoples across the globe. This
pandemic has hit the countries globally at a speed and scale that no one ever expected. Countries have under lock down in order to save
their people from this dangerous virus. Schools, colleges, offices and businesses and many other economic activities has been put on hold
till the time the situation gets normal. India have been put in the shutdown mode for almost the period of two months making all economic
activities completely lockdown. By this move majority of economic activities such as factories, construction works, hotels, malls, restaurants
hotels, and many other activities have been put on complete hold. According to many economist and experts it is being forecasted that
complete lock down of economic activities for such a long period of time would drastically affect the overall Indian economy. Which is
already struggling from couple of years. As per the latest reports and data the current growth of Indian economy for this quarter is projected
to be 4.5% for the period 2019-20.The report also suggested that if the lockdown extends beyond after the period of 21 days which is
already the situation, the growth is further to be declined to 3%. Let's talk about what's the various credit agency rating of world is saying
about India’s growth as per famous credit agencies Moody’s the Indian growth estimate is to be 2.5% in 2020.Goldman Sachs has
projected India real GDP to 1.6% for financial year 2021. Whereas S&P global ratings has projected the growth of India to only 1.8% for the
financial year 2021. But the most important projection is by the World Bank, it projects India’s growth to be between 1.5% to 2.8% for the
period 2020-21. The lock down has severely affected the private consumption which mainly include sector such as transport,
communication, education, restaurant, hotels, cultural activities, etc. Peoples are only consuming the necessities goods and the trend is
likely to continue for the next quarter also. The Micro Small and Medium Enterprises (MSMEs) are more likely to get affected by covid-19
outbreak as they have been shuttered down till May 3rd for further orders. And to make it further hard MSMEs are given direction by govt. to
keep paying salaries to the workers and employees. According to various news report, data shows that MSMEs employs 110 million people
across the country. With so large amount of people to give salaries in complete lockdown would be not suitable and feasible for the
MSMEs. Many peoples and workers who work in the informal sector are worrying less for their health due to Covid-19 rather than worrying
more for their two times and the survival. The situation vulnerable for Labour class and this not the situation for one state this the condition
throughout the country Now Let’s talk in detail the impact of Covid-19 Industry by Industry. Apparel and Textiles * These industries
contribute almost 2% of the GDP and employ more than 45 million direct jobs in India. The demand has severely affected as majority of
malls, big bazars, shopping outlets and stores are closed due to the lockdown. * These industries were already facing profitability issues
from couple of years the of the pandemic coviid-19 has made the situation more vulnerable. * If the situations continue to remain the same
for one or two months more the textile and apparel market would be very significantly affected and is expected to decline by 10-12% in the
period Apr-June quarter 2020. * The yarn production is expected to decline by 12.5% and 18-20 % decline in apparel production die to
covid-19 lockdown. * The premium retail apparel brands would suffer demand loss for long run also as this lockdown has reduce the paying
capacity of a consumer. Recommended Measures Tax relief, intensive rate reduction on the taxes loan allowances and financial support
are some of the suggested measures by economic experts thar needs to be immediately taken so industry could revive and properly
functioning. Auto and Auto Components * Let’s move to auto and auto components industry, which contributes almost 9.4 % of the GDP
and employs more than 40 million peoples. * As majority of auto component part are imported from china and which was disturbed due to
supply chain breakdown amidst of virus, the production was stopped even before the lockdown was announced. * One of the reasons for
declining of this industry is consumer demands have been continually reducing, and the current reason is stoppage of production due to the
lockdown. * Passenger Vehicles, Commercial Vehicles, and Auto parts all are likely to see less demand and production in coming quarter
as the chances of increasing consumer demand and better supply chain with China is quite low. * The impact also workers and employees
who were working in these industries, the chances are of mass job cuts and retrenchment as companies want to minimize the cost and
losses due to this lockdown. Recommended Measures Cut in GST rates, decrease the rate of exercise duties and allowing income tax
reduction on auto loans, postponing the compulsory BS-VI engines norms for more time are some of the prominent measures suggested by
industry and economic experts.