Topic Name:-How Covid 19 has impacted the Economy of

India and the World ? What could be done by public as well

as private sector to improve the economy ?

Coronavirus disease 2019 (COVID-19) is defined as illness

caused by a novel coronavirus now called severe acute
respiratory syndrome coronavirus 2 (SARS-CoV-2; formerly
called 2019-nCoV), which was first identified amid an outbreak
of respiratory illness cases in Wuhan City, Hubei Province,
China.It was initially reported to the WHO on December 31,
2019. On January 30, 2020, the WHO declared the COVID-19
outbreak a global health emergency. On March 11, 2020, the
WHO declared COVID-19 a global pandemic, its first such
designation since declaring H1N1 influenza a pandemic in
2009. 
The economic impact of the 2019–20 coronavirus pandemic
in India has been largely disruptive. The world bank and rating
agencies had initially downgraded India's growth for fiscal year
2021 with the lowest figures India has seen in three decades
since India's economic liberalization in the 1990’s. 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. Within a month,
unemployment rose from 6.7% on 15 March to 26% on 19
April. During the lockdown, an estimated 14 crore (140 million)
people lost employment.More than 45% of households across
the nation have reported an income drop as compared to the
previous year.
The indian economy was expected to lose
over ₹32,000 crore (US$4.5 billion) every day during the first
21 days of lockdown, which was declared following
the coronavirus outbreak. Under complete lockdown, less than a
quarter of India's $2.8 trillion economic movement was
functional. Up to 53% of businesses in the country were
projected to be significantly affected. 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. Those in the informal sectors and daily wage
groups are the most at risk. A large number of farmers around
the country who grow perishables are also facing uncertainty.
Various businesses such as hotels and airlines, are cutting
salaries and laying off employees.
Major companies in India such as larsen & tourbo, bharat
forge, ultra tech cement, grasim inndustries, aditya birla
group,BHEL and tata motors have temporarily suspended or
significantly reduced operations. Young startups have been
impacted as funding has fallen. Fast-moving consumer goods
companies in the country have significantly reduced operations
and are focusing on essentials. Some defense deals have been
affected/delayed due to the pandemic, such as the delivery
of dassault rafale fighter jets. In India up to 53% of businesses
have specified a certain amount of impact of shutdowns caused
due to COVID-19 on operations (FICCI survey).Around
140,000,000 (14 crores) Indians lost employment in the
lockdown. More than 45% households across the nation have
reported an income drop as compared to the previous
year. Various business such as hotels and airlines are cutting
salaries and laying off employees. Revenue of ola cabs went
down nearly 95% in March-April resulting in 1400 layoffs. It is
estimated that the loss to the tourism industry will
be ₹15,000 crore (US$2.1 billion) for March and April
alone. CII, ASSOCHAM and FAITH estimate that a huge chunk
of the workforce involved with tourism in the country faces
unemployment. Live events industry has seen an estimated loss
of ₹3,000 crore (US$420 million). A number of young startups
have been impacted as funding has fallen. 
The Indian economy is expected to lose
over ₹32,000 crore (US$4.5 billion) every day during the first
21 days of the lockdown, according to Acuite reading, a RBI
approved credit rate agency. Confedearation of indian
industry (CII) had sought an economic fiscal stimulus package
of 1% of India's GDP amounting to ₹2 lakh
crore (US$28 billion). The fiscal package and fiscal policies
approach is being compared to what has happened in other
countries such as Germany, Brazil and Japan. Due to covid 19
let us discuss about some other sector which are affected due to
covid 19, sector like Energy, Agriculture, Manufacturing, e-
commerce, stock market etc
Energy
Night lights and economic activity are connected. In Delhi,
night light radiance fell 37.2% compared to 1–31 March 2019.
This was the biggest fall for any metro in India. Bangalore fell
32% while Mumbai dropped by 29%. India's fuel demand in
April 2020 as compared to the previous year fell nearly 46%.
Consumption of fuel was the lowest since 2007. Cooking gas
(LPG) sales rose ~12%. An international energy agency report
in April estimated India's annual fuel consumption will decline
5.6% in 2020. Diesel demand will drop ~6%.
Agriculture
Due to logistical problems following the lockdown tea estates
were unable to harvest the first flush. The impact of this on the
second flush is not known. The entire Darjeeling tea based tea
industry will see significant fall in revenue. Tea exports could
drop up to 8% as a result.
From 20 April, under the new lockdown guidelines to reopen
the economy and relax the lockdown, agricultural businesses
such as dairy, tea, coffee, and rubber plantations, as well as
associated shops and industries, will reopen.
Manufacturing
iPhone producing companies in India have also suspended a
majority of operations. Nearly all two-wheeler and four-wheeler
companies have put a stop to production till further notice.
Many companies have decided to remain closed till at least 31
March such as Cummins which has temporarily shut its offices
across Maharashtra. Hindustan unilever ITC and Dabur
India have shut manufacturing facilities except for factories
producing essentials. Foxxcon and Wistron corp, iPhone
producers, have suspended production following the 21 days
lockdown orders. So the revenue of company has been fallen
down and also some of the employee have to lose the job.
Stock markets
on 23 March 2020, stock markets in India post worst losses in
history.SENSEX fell 4000 points (13.15%) and NSE NIFTY fell
1150 points (12.98%). However, on 25 March, one day after a
complete 21-day lock-down was announced by the Prime
Minister, SENSEX posted its biggest gains in 11 years, adding a
value of ₹4.7 lakh cror (US$66 billion) crore for investors. On 8
April, following positive indication from the Wall Street that the
pandemic may have reached its peak in the US, the stock
markets in India rose steeply once again. By 29 April, Nifty held
the 9500 mark.
E-commerce
In the third week of March, Amazon announced that it would
stop sale of non-essential items in India so that it can focus on
essential needs. Amazon has followed the same strategy in Italy
and France. On 25 March, Walmart-owned  Flipcart temporarily
suspended some of its services on its e-commerce platform and
will only be selling and distributing essentials. BigBasket
and Grofers also run restricted services, facing disruptions in
services due to the lockdown.
Migrant workers and labour force
Due to the lockdown, daily-wage workers (the urban poor and
migrant laborers) were left with no work. At the same time, the
lockdown restrictions put a stop on the movement of buses and
trains. Large numbers of migrant workers ended up walking
back to there villages.
These were the impacts of covid-19 on india economy, now we
will see the impact on world economy by covid-19.
The outbreak of pandemic Covid-19 all over the world has
disturbed the political, social, economic, religious and financial
structures of the whole world. World’s topmost economies such
as the US, China, UK, Germany, France, Italy, Japan and many
others are at the verge of collapse. Besides, Stock Markets
around the world have been pounded and oil prices have fallen
off a cliff. In just a week 3.3 million Americans applied for
unemployment and a week later another 6.6 million people
started searching for jobs. Also, many experts on economic and
financial matters have warned about the worsening condition of
global economic and financial structure. Such as Kristalina
Georgieva, Managing Director of International Monitory Fund
(IMF), explained that “a recession at least as bad as during the
Global Financial Crisis or worse”. Moreover, Covid-19 is
harming the global economy because the world has been
experiencing the most difficult economic situation since World
War-II. When it comes to the human cost of the Coronavirus
pandemic it is immeasurable therefore all countries need to
work together with cooperation and coordination to protect the
human beings as well as limit the economic damages. For
instance, the lockdown has restricted various businesses such as
travelling to contain the virus consequently this business is
coming to an abrupt halt globally.
The spread of the epidemic is picking up speed and causing
more economic damages. It is stated by the U.S. official from
federal reserves that American unemployment would be 30%
and its economy would shrink by half. As for as the jobs of
common people are concerned, there is also a real threat of
losing their jobs because with business shutting down that
shows that companies will be unable to pay to workers
resultantly they have to lay off them. While when it comes to
the stock market, it is severely damaged by Covid-19 such as the
stock market of the United States is down about thirty percent.
By looking over the existing condition of several businesses,
most of the investors are removing its money from multiple
businesses in this regard $83 billion has already removed from
emerging markets since the outbreak of Covid-19. So, the
impact of Covid-19 is severe on the economic structure of the
world because people are not spending money resultantly
businesses are not getting revenue therefore most of the
businesses are shutting up shops.
It also observed that the economic recovery from this fatal
disease is only possible by 2021 because it has left severe
impacts on the global economy and the countries face multiple
difficulties to bring it back in a stable condition. Most of the
nations are going through recession and collapse of their
economic structure that points out the staggering conditions for
them in this regard almost 80 countries have already requested
International Monetary Fund (IMF) for financial help. Such as
Prime Minister of Pakistan Imran Khan also requested IMF to
help Islamabad to fight against Novel Coronavirus.
Furthermore, there is uncertainty and unpredictability
concerning the spread of Coronavirus. So, the Organization for
Economic Cooperation and Development (OECD) stated that
global growth could be cut in half to 1.5% in 2020 if the virus
continues to spread. Most of the economists have already
predicted about the recession to happen because there is no
surety and still no one knows that how for this pandemic fall and
how long the impact would be is still difficult to predict.Besides,
Bernard M. Wolf, professor, Economics Schulich School of
Business, said that “it is catastrophic and we have never seen
anything like this, we have a huge portion of the economy and
people under lockdown that’s going to have a huge impact on
what can be produced and not produced”.
As Covid-19 has already become a reason for closing the
multiple businesses and closure of supermarkets which seems
empty nowadays. Therefore, many economists have fear and
predicted that the pandemic could lead to inflation. For instance,
Bloomberg Economics warns that “full-year GDP growth could
fall to zero in a worst-case pandemic scenario”. There are
various sectors and economies that seem most vulnerable
because of this pandemic, such as, both the demand and supply
have been affected by the virus, as a result of depressed activity
Foreign Direct Investment flows could fall between 5 to 15
percent. Besides, the most affected sectors have become
vulnerable such as tourism and travel-related industries, hotels,
restaurants, sports events, consumer electronics, financial
markets, transportation, and overload of health systems. 
Covid-19 pandemic impacted drastically on india as well as
global economy, so recovery from this is very essential, thats
why government of india or we can say public sector can be
done following and some of the recovery measures has been
done by government of india like The governmet of india has
announced a variety of measures to tackle the situation,
from food security and extra funds for healthcare, to sector
related incentives and tax deadline extensions. On 26 March a
number of economic relief measures for the poor were
announced totaling over ₹170,000 crore(US$24 billion). The
next day the Reserve bank of india also announced a number of
measures which would make
available ₹374,000 crore (US$52 billion) to the country's
financial system. On 3 April the central government released
more funds to the states for tackling the coronavirus totaling
to ₹28,379 crore(US$4.0 billion). The World Bank and Asian
development bank have approved support to India to tackle the
coronavirus pandemic. On 14 April 2020, the Prime Minister of
India extended the lockdown to 3 May. A new set of guidelines
for the calibrated opening of the economy and relaxation of the
lockdown were also set in place which would take effect from
20 April. On 17 April, the RBI governor announced more
measures to counter the economic impact of the pandemic
including ₹50,000 crore (US$7.0 billion) special finance
to NABARD, SIDBI, and NHB. On 18 April, to protect Indian
companies during the pandemic, the government
changed india’s foreign direct investment policy.
The Department of military affairs put on hold all capital
acquisitions for the beginning of the financial year. The Chief of
defence staff has announced that India should minimize costly
defense imports and give a chance to domestic production; also
making sure not to "misrepresent operational requirements". On
12 May the Prime Minister announced an overall economic
package worth ₹20 lakh crore (US$280 billion),10% of India's
GDP, with emphasis on India as a self-reliant nation. During the
next five days the Finance Minister announced the details of the
economic package. Two days later the Cabinet cleared a number
of proposals in the economic package including a free food
grains package.
On 23 April Confederation of indian industry (CII), in a paper
titled "A plan for economic recovery", outlined three measures
that the government should take such as cash transfers to JAM
account holders, a credit protection scheme for Micro, Small
and Medium Enterprises (MSME’s) and creation of a special
purpose vehicle (SPV/SPE) to limit "Government exposure
while providing adequate liquidity to industry". On 24
April bina aggrawal, an Indian development economist, has
suggested that the government "create green worker pools, not
green zones" as part of lockdown re-calibration efforts. On 28
April, anand mahindra said a graded re-opening of the lockdown
will make economic recovery 'painfully slow'; with the economy
being so very interconnected, the lockdown should be lifted
comprehensively once the optimal lockdown period as per
research has been completed.The council on energy,
environment and water has recommended a greener recovery.
Also central government can do:-
 Big fiscal stimulus

 Govt should borrow more immediately as private demand

for funds is weak

 Provide tax relief to troubled sectors

 Interest subvention to boost consumption, real

 Spend more on projects under implementatation

 Step up funds for healthcare
Also to revive the economy, three sets of measures
recommended, first, the plan proposes that in rural areas
MNREGS job gaurantee should be expanded to 200 days per
household, besides compensating MNREGS workers for job
loss during lockdown and payment of their pending wages. It
also proposes an urban employment guarantee for 100 days for
this year. Second, the plan of action suggests compensation for
loss of job, salary or livelihood. This could take multiple forms:
job loss allowance for salaried, wage subsidies for firms, crop
loss compensation for farmers and one time support for hawkers
and petty businessman. Third, the plan recommends that there
should be no interest charged to weaker sections till the
economy revives. It suggests three months of loan deferment
and interest waiver f or farmers, small business and for first time
house loans. Also to increase the economy of india, india should
be self dependent, thats why government of india brought
Atmnirbhar Bharat Abhiyaan. A few days back, the finance
minister explains the detail of the package of 20 lakh crore
economic stimulus package. The main motive of this initiative
to make india self- reliant. Let us check out the main features of
the Atmanirbhar Bharat package drive. 

1. The prime minister aims to make India confident. Atmnirbhar

Bharat aims at creating products within India and sell those.
This will in-turn reduce the dependency on other countries.
Therefore, India would have the upper hand in deciding its own
course. Other developed nations will not be able to utilize the
loopholes and gain on that front. 
2. The prime minister has laid out a plan, where there will be
several provisions for the upliftment of the society. There will
be several offers for various sections of society. 
3. According to the minister, this will lead to increased self-
confidence. The government does not wish to isolate the country
as such. 
4. Till now, Rs 52,606 crore has been credited to Jan Dhan
Account Holders. Rs 18,000 crore worth grain has also been
transferred. 
5. The drive will ensure that the BPL cardholders, migrant
workers and aged do not suffer. 
6. Moreover, there is a provision of collateral-free MSME
loans. 
7. The government is planning to give Rs 20,000 crore to
MSMEs. This would, in turn, help 2 lakh MSMEs. 
8. ‘Make in India’ campaign is bound to be a success story.
more people will get engaged in self-reliant business stories. 
9. Moreover, the Government is also planning to start a Rs
30,000 crore scheme, in which they will be making investments
in NBFCs, HCFCs, and MFIs. 
The Atmnirbhar Bharat yojana aims to bring relief to various
sectors, that are affected by the Covid-19. The
Government’s Package aims to bring about fiscal relief that may
be considered as 1.1% of GDP. They have also allowed most
states to increase borrowing to 0.50% of the Gross State
Domestic Product. Thus, the main aim of this package is to
bring in new reforms in agriculture and public sector enterprises.
To uplift the economy of india, which is fallen down due to
covid-19 pandemic, the government of india should have the
things to better the presence as well as future, thats why they
brought The Atmnirbhar Bharat yojana. It is divided into five
tranche (parts), some benefits of tranche are as follows:-
The benefits under First tranche of Atmanirbhar Bharat
package include:
 MSMEs get collateral-free loans. Moreover, the government
will give a cent percent credit guarantee to banks and Non
Banking Financial Institutions. 
 The government will be infusing equity into debt-ridden
MSMEs. The government will likely provide Fund of funds to
the amount of Rs 10 crore. 
 There will be EPF support from the government that will
amount to Rs2,500 crore. 
 Moreover, the employee and employer contribution to EPF
has been reduced for three months. 
 
The second Tranche 2 of the Atmanirbhar Package for
the Atmnirbhar Bharat.
 The size of this package is Rs 3.10 lakh crore. That amounts
to 1.55 % of GDP. This package includes. 
 Supply of food grains for free to the migrant workers. The
amount is Rs 3,500 crore. 
 Those who are a part of Mudra-Shishu loans will get a
subvention of Rs 1,500 crore. 
 There will be a special liquidity scheme that will provide Rs
10,000 capital to almost 50,00,000 street vendors. The value of
such an amount is Rs. 5000 crores.
 Middle-income groups will get a credit-linked subsidy.
 Plantation workers also stand to get Rs 6,000 crore. This will
be a part of the CAMPA funds. 
Part 3

 There is a separate scheme aimed towards funding for

fishermen through PM Matsya Sampada Yojana. This will be
around Rs 20,000 crore. 
 There is an “Animal Husbandry Infrastructure Development
Fund” as well. This totals to anamountof Rs 15,000 crore. 
 The government is also promoting herb cultivation of the
amount of Rs. 4000 crores. 
In portion 4, This total fund in this category amounts to Rs
8,100 crore. This is the Viability Gap Funding. 
Tranche 5 of the Atmanirbhar Bharat package includes:

 The limit for borrowing with respect to state funds has also
been increased to 5% from 3%. 
 MGNREGA also gets Rs 40,000 crore. 
Agricultural Reforms Decoded – Atmnirbhar Bharat
Yojana.
 There is a 1 lakh crore Agri-infrastructure fund that includes
various provisions for cold chain supply and management,
apart from post-harvest measures. This will ensure to provide
farmers with more and more avenues to leverage from the
situation. The money will ensure proper facilitation in areas
like infrastructure build-up and supply chain management. 
 The Rs 10,000crore has been announced to facilitate Micro
Food Enterprises. This scheme is focusing on ‘Vocal for
Local with Global Outreach.’ This has been specified in the
latest address to the nation. This is the best of the self-
reliance rule that ‘Atmnirbhar;’ means.
 Under this scheme, there is another Rs 20,000 crore for
fishermen. The Pradhan Mantri Matsya Sampada
Yojana aims to fill in the gaps between the supply chain of
which fishermen are a part. This includes all fisheries. Out of
this fund, around Rs, 11,000 crores is segregated for marine,
inland fisheries and aquaculture. Moreover, the government
will disburse a total amount of Rs 13,343 crores that have
been set aside for National Animal Disease Control.
 We have already informed you regarding the various funds
for herbal farming. A large part of the funds has been
allocated to promote herbal farming. Moreover, an additional
10,00,000 hectares of agricultural land will be brought under
the scheme, in the next two years. 
 Moreover, Rs 500 crore has been allocated for Operation
Green. This will ensure that agricultural products will not be
wasted. This will extend for a few months for produces like
fruits and several vegetables. The government will also help
in transportation and the supply chain management function. 
The prime minister’s economic package aims to create an India,
that is self-sufficient. This will help India, on the global
platform as well.
Also, the  The private sector’s role in encouraging a country’s
growth and economic development cannot be overstated. Private
enterprises are the chief agents in creating employment,
providing funds, building competitiveness and driving
innovation - all essential instruments for growth.
Creating Livelihoods
The private sector has strong links to higher investments in
education and vocational training to bridge skill gaps in the
economy, facilitating skills and training programmes, creating
partnerships with educational institutes and experts and, most
importantly, creating a future-ready and talented workforce. In
addition, most large, private enterprises have created in-house
training and skills programmes to help build the capacities of
young workers in line with industry needs.

Driving investments is vital

Private investments by the corporate sector are critical to higher

growth rates and economic development. More investment
creates a multiplier effect in the economy by generating both
direct and indirect employment, boosting consumption and
fostering further development.

Making use of technology

 An important objective for the private sector must be to

facilitate the transfer or spread of new technology through
industry-led initiatives or by building new business models that
employ technology in new ways, which in turn will increase
productivity and lead to sustainable economic growth.

The private sector has the power to harness and use technology
to unleash greater prosperity for the nation, but it is also
responsible for ensuring that the benefits of technology reach all
sections of society. A focus on affordable technology to allow
equal access is imperative for inclusive development.
Technology-enabled development in sectors such as health and
education go a long way in ensuring equitable development in
emerging economies, which the private sector is best equipped
to provide.
Fostering entrepreneurship and innovation

Corporates are integral to fostering innovation and

entrepreneurship and ensuring the future progress of an
economy. Private sector investments provide necessary
infrastructure that is sustainable, reliable, and can use modern
technology to create new products and services. In most
countries, the private sector plays the lead role in research and
development spending, working with universities and
institutions to translate new research into markets and crafting
innovative business models and strategies.