Subject – Business Environment

Course Number: PSMBTC201

Submitted by: Gurleen Kour

Roll No. 22-MBA-19

Submitted to: Dr. Shelleka Gupta

IMPACT OF COVID-19
ON BUSINESS
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Impact of Covid-19 on different environment factors

INTRODUCTION
In late December 2019, an outbreak of a mysterious pneumonia
characterized by fever, dry cough, and fatigue, and occasional
gastrointestinal symptoms happened in a seafood wholesale wet
market, the Huanan Seafood Wholesale Market, in Wuhan, Hubei,
China.1 The initial outbreak was reported in the market in December
2019 and involved about 66% of the staff there. The market was shut
down on January 1, 2020, after the announcement of an
epidemiologic alert by the local health authority on December 31,
2019. However, in the following month (January) thousands of
people in China, including many provinces (such as Hubei, Zhejiang,
Guangdong, Henan, Hunan, etc.) and cities (Beijing and Shanghai)
were attacked by the rampant spreading of the disease.2
Furthermore, the disease traveled to other countries, such as
Thailand, Japan, Republic of Korea, Viet Nam, Germany, United
States, and Singapore. The first case reported in our country was on

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January 21, 2019. As of February 6, 2020, a total of 28,276 confirmed

cases with 565 deaths globally were documented by WHO, involving
at least 25 countries.3 The pathogen of the outbreak was later
identified as a novel beta-coronavirus, named 2019 novel
coronavirus (2019-nCoV) and recalled to our mind the terrible
memory of the severe acute respiratory syndrome (SARS-2003,
caused by another beta-coronavirus) that occurred 17 years ago.

Economic impact
Global shares take a hit
Big shifts in stock markets, where shares in companies are bought
and sold, can affect many investments in pensions or individual
savings accounts (ISAs).
The FTSE, Dow Jones Industrial Average and the Nikkei have all seen
huge falls since the outbreak began on 31 December.
The Dow and the FTSE recently saw their biggest one day declines
since 1987.

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The coronavirus outbreak, which originated in China, has infected

more than 550,000 people. Its spread has left businesses around the
world counting costs.
Here is a selection of maps and charts to help understand the
economic impact of the virus so far.

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Impact on Indian economy

Economic situation
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).[7] Various business such as hotels and airlines are cutting
salaries and laying off employees.[10] Live events industry has seen an
estimated loss of ₹3,000 crore (US$420 million).[10] A number of
young startups have been impacted as funding has fallen.[11] A
DataLabs report shows a 45% decrease in the total growth-stage
funding (Series A round) as compared to Q4 2019.[12] On 4 April,
former Reserve Bank of India chief Raghuram Rajan said that the

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coronavirus pandemic in India may just be the "greatest emergency

since Independence".[24]
Numerous companies are carrying out measures within their
companies to ensure that staff anxiety is kept at a minimum. Hero
MotoCorp has been conducting video townhall meetings, Tata Group
has set up a task force to make working from home more effective
and the taskforce at Siemens also reports on the worldwide situation
of the COVID-19 pandemic.[78]
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%.[79]
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.[80] Tea exports could drop up to 8% as
a result.[81]
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.[66]
Manufacturing
Major companies in India such as Larsen and Toubro, Bharat Forge,
UltraTech Cement, Grasim Industries, the fashion and retail wing
of Aditya Birla Group, Tata Motors and Thermax have temporarily
suspended or significantly reduced operations in a number of
manufacturing facilities and factories across the country. Nearly all
two-wheeler and four-wheeler companies have put a stop to
production till further notice. Many companies have decided to

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remain closed till at least 31 March such as Cummins which has

temporarily shut its offices across Maharashtra.[82] Hindustan
Unilever, ITC and Dabur India have shut manufacturing facilities
expect for factories producing essentials.[83] Foxconn and Wistron
Corp, iPhone producers, have suspended production following the 21
days lockdown orders.[84]
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.[13] Amazon has followed the same strategy in Italy and
France.[13] On 25 March, Walmart-owned Flipkart temporarily
suspended some of its services on its e-commerce platform and will
only be selling and distributing essentials.[85] Big Basket and Grofers
also run restricted services, facing disruptions in services due to the
lockdown.[86] Delhi Police began issuing delivery agents curfew
passes to make it easier for them to keep the supply chain open. [87]
E-commerce companies also look for legal clarity related to what
are "essentials".[88]
On 20 April, Telangana extended the lockdown to 7 May. Swiggy and
Zomato will not be allowed to function during this extension period.
[89]

Stock markets
On 23 March 2020, stock markets in India post worst losses in
history.[14] SENSEX fell 4000 points (13.15%) and NSE NIFTY fell 1150
points (12.98%).[90] 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 crore
(US$66 billion) crore for investors.[15][91] 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 [92][93]
again.
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Estimate of economic losses

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 Acuité Ratings, a RBI approved credit rating agency.[4]
Barclays said the cost of the first 21 days of shutdown as well as the
previous two shorter ones will be total to around ₹8.5 lakh crore
(US$120 billion).[83][5]
On 27 March, Moody's Investors Service downgraded its estimate of
India's GDP growth for 2020 from 5.3% to 2.5%.[94] Fitch Ratings
revised its estimate for India's growth to 2%. India Ratings &
Research also downgraded the FY21 estimate to 3.6%. [1] On 12 April
2020, a World Bank report focusing on South Asia said that India's
economy is expected to grow 1.5% to 2.8% for FY21.[1] This will be
the lowest growth for India in 30 years.[2] The World Bank report said
that the pandemic has "magnified pre-existing risks to India’s
economic outlook".[1]
Confederation of Indian Industry (CII) has sought an economic fiscal
stimulus package of 1% of India's GDP amounting to ₹2 lakh crore
(US$28 billion).[95] The fiscal package and fiscal policies approach is
being compared to what has happened in other countries such as
Germany, Brazil and Japan.[96] Jefferies Group said that the
government can spend ₹1.3 lakh crore (US$18 billion) to fight the
impact of coronavirus.[97] Bloomberg's economists say at least ₹2.15
lakh crore (US$30 billion) needs to be spent.[97]
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.[98]

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COVID-19 Economic Response Task Force

The formation of the COVID-19 Economic Response Task Force was
announced by Prime Minister Narendra Modi on 19 March 2020
during his live address to the nation.[69][70][71] The task force is led by
the finance minister Nirmala Sitharaman.[72] Though not formally
constituted or no official date for relief packages being made, the
consultation process with concerned parties has begun immediately.
[73]
[74] There were concerns as to where will the government find the
funds to fight coronavirus and keep the economy alive.[75] Experts say
the task force will have to look in to NPA norms, tax payments and
income support to those in the unorganised sectors.[76] A direct cash
transfer scheme for the most vulnerable is also being considered, as
has happened in other countries.[77] The Ministry of Finance
immediately started consultations with the RBI and ministries to take
stock of most affected sectors like aviation, hospitality, and MSMEs.
[74]
On 24 March the Finance Minister made a number of
announcements related to the economy with regard to the impact of
COVID-19.[36] On 26 March the Finance Minister announced more
economic relief measures for the poor among other announcements.
[42]

Social Impact: The human consequences

In recent weeks, we have seen the significant economic impact of
the coronavirus on financial markets and vulnerable industries such
as manufacturing, tourism, hospitality and travel. Travel and tourism
account for 10% of the global GDP and 50 million jobs are at risk
worldwide. Global tourism, travel and hospitality companies closing
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down affects SMEs globally. This, in turn, affects many people,

typically the least well-paid and those self-employed or working in
informal environments in the gig economy or in part-time work with
zero-hours contracts. Some governments have announced
economic measures to safeguard jobs, guarantee wages and
support the self- employed, but there is a lack of clarity in many
countries about how these measures will be implemented and how
people will manage a loss of income in the short-term.

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Famous landmarks around the world deserted

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Some social trends inspired during lockdown

Figure 1 Brands promoting social distancing

Figure 2 Viral social media challenges

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Technological Impact

The development and implementation of technology solutions aimed

at combating the COVID-19 outbreak are rapidly taking shape around
the world. Governments, Venture Capitalists, Academic Institutions,
Incubators, Startups, and businesses large and small are all doing
their part to deploy new innovative solutions as quickly as possible.
Some key innovations:
Disinfection warriors: Texas-based firm that provides hospitals with
disinfection robots is scaling up manufacturing to empower facilities
in the country and globally to wipe out the virus from their
premises.

Figure 1 automatic disinfectant

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Figure 2 Pandemic drones

Figure 3 Digitisation of traditional classrooms

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Figure 4 Development of new apps

Political impact

The crisis is also testing political leadership, as some presidents are

emerging as strong, unifying leaders, while others flounder, in a
continent where historically trust in formal institutions is low.
 Decisive leadership has proven crucial for implementing wide-
ranging lockdowns, and for the immediate commitment to
social assistance. The presidents of Argentina and Peru stand
out as examples of fast and coordinated responses.

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 The potential abuse of extraordinary powers raises concerns

for the medium run. In Chile and Bolivia, governments
struggling with legitimacy after last year’s massive protests
have had to postpone a constitutional convention vote in the
former and presidential elections in the latter.
 Many governments have quickly promised social assistance.
An enormous economic rescue package in Chile stands out for
its stinginess towards the most vulnerable.
 Where populist presidents from the right (Brazil) or left
(Mexico) deny the seriousness of the pandemic, subnational
and other authorities seek to fill the leadership vacuum – but
policy implementation is harmed. The heaviest price will be
paid by the most vulnerable.
 Latin America will suffer from post-crisis external shocks. With
little aid coming from the United States or Europe, China
emerges as a key hope for shipments of face masks, test kits,
and protective gear.

How Covid-19 is changing Indian politics?

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Crisis is opportunity
Covid-19 is a political opportunity for Narendra Modi. And luck often
favours him. If he can bring India out of this crisis relatively less
affected than the West, he will be even stronger than he became
after 23rd May. He will have a lot more political capital to pursue the
Hindutva agenda and ignore the economic slump.
So far his record on Covid-19 is mixed. He can say he did an early
lockdown, not making the mistake of Britain’s Boris Johnson and US’
Donald Trump. But Modi has been failing on testing and providing
protective gear to medical workers. He can say he was early with
screening people at airports but even that had several loopholes and
not all incoming travellers were screened, and he followed it up with
an ill-planned lockdown that is now causing more harm than good.

A new page for the opposition :The public will now test Narendra
Modi on three counts: response to the pandemic, the health
infrastructure at large, and the state of the Indian economy. On all
three fronts, the opposition has a big window of opportunity, which
will last at least a few weeks if not a few months.
For the most part, the Congress party’s response to the Covid-19
crisis has come across as mature, its opposition constructive. It is
criticising the Modi government’s follies and yet not appearing to be
Pavlovian in its criticism. It is coming across as trying to solve a grave
problem rather than score political brownie points and bring down
Narendra Modi.

Chief ministers lead the way:In what may or may not be a

coincidence, the chief ministers standing out in the crisis are all in
non-NDA ruled states. This does not include Delhi chief minister
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Arvind Kejriwal, who is standing in a halfway house between

opposition and NDA ally.
While the loudest applause has been won by Kerala’s Pinarayi
Vijayan, Punjab’s Amarinder Singh has earned praise for making his
police force implement the lockdown with sensitivity. Rajasthan’s
Ashok Gehlot may not be doing a great job at PR but his alertness has
so far prevented a bad situation in Bhilwara from exploding into
community transmission. Uddhav Thackeray has used the crisis to
cement a working relationship with his alliance partners in
Maharashtra and has thus earned praise for displaying maturity

Legal impact of Covid-19

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A checklist of legal issues to consider

1. Crisis management: review existing policies and ensure key
employees and management are familiar with them. Who has
authority to make immediate decisions with respect to the
crisis? Develop a consistent and effective communication plan.
2. Employment issues: employers generally owe a duty to ensure
that reasonable care is taken to safeguard the health and
safety of employees at work. Review and assess what changes
may be necessary or appropriate for your HR policies, such as
absenteeism, leave, flexible work and overseas travel.
3. Business continuity: are you prepared for the possible
implications on the business of travel restrictions and
quarantines? How will you keep the business operating on
skeleton staff, or will you have to shut up shop? For example,
businesses in the retail and hospitality industries may be
particularly affected by a lack of customers and staff in the
event of widespread quarantine arrangements.
4. Dispute resolution: any event that leads to public disruption
can be a fertile breeding ground for disputes to arise. Consider
carefully commercial contract terms, including force majeure
and notice requirements, and be alert to inadvertently
agreeing to a contractual variation/waiver.
5. Communication is key: clear communications will be needed
with key stakeholders as to the impact of the spread of
coronavirus on the business. Investors, customers, suppliers,
and staff will all need to be informed about how the business is
dealing with the issue and what it means for them.

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6. Listed companies need to bear in mind disclosure obligations: a

material disruption to the company’s business; material
impairment of business performance or outlook; a material
change in the company’s business plan; or a pending
transaction likely to be cancelled or delayed as a result of the
outbreak might all necessitate an announcement.
7. Financial reporting: companies need to consider whether to
refer to the possible impact of COVID-19 on their business in
their reporting of principal risks and uncertainties, and,
potentially, in the carrying value of assets and liabilities and
should ensure that they provide up-to-date and meaningful
disclosure. The Stock Exchange of Hong Kong has issued
guidance for companies due to publish their results in March
2020 and US regulators have urged issuers to consider their
audit processes in the light of disruption which may limit
access to information or personnel.
8. Capital markets and loan financing: issuers or underwriters
working on international offerings may need to consider the
impact on: diligence and disclosure, consents, approvals,
termination and settlement dates.
9. Financial regulatory: the Securities and Futures Commission
and the Hong Kong Monetary Authority have previously issued
guidance on business continuity planning where there has been
a serious communicable disease. This guidance covers issues
such as delays to “business as usual”, treating customers fairly,
notification obligations, record-keeping requirements and
keeping senior management updated.

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Environmental Impact of COVID-19

It’s estimated that at least one-quarter of the world’s population, or

roughly two billion people, are now under some form of stay-at-
home order because of the coronavirus.

This significant slowdown in economic activity has also led to an

environmental impact.

The widespread effects of ecological effects were most visible in the

air quality of different cities.

Within a time frame of 30 days, significant improvement were noted

in the quality of air in major cities.

The following satellite images captures the impact of reduced activity

due to decline in traffic pollution, as observed by the NASA satellite

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CONCLUSION
From a global perspective, there are four possible futures: a descent
into barbarism, a robust state capitalism, a radical state socialism,
and a transformation into a big society built on mutual aid. Versions
of all of these futures are perfectly possible, if not equally desirable.
Coronavirus, like climate change, is partly a problem of our economic
structure. Although both appear to be “environmental” or “natural”
problems, they are socially driven.
What is hopefully clear is that all these scenarios leave some grounds
for fear, but also some for hope. Covid-19 is highlighting serious
deficiencies in our existing system. An effective response to this is
likely to require radical social change. The upside of this is the
possibility that we build a more humane system that leaves us more
resilient in the face of future pandemics and other impending crisis.
One of the things the Covid-19 crisis is doing, is expanding that
imagination. As governments and citizens take steps that three
months ago seemed impossible, our ideas about how the world
works could change rapidly. Let us look at where this re-imagining
could take us.

Bibliography
How will coronavirus change the world? - BBC Future
COVID-19: Responding to the business impacts of Coronavirus - PwC
Environmental Impact of COVID-19 Lockdowns Seen from Space | Chicago
News | WTTW
Living with Covid-19: How lives have changed - The Economic Times
Satellite images show the impact of COVID-19 coronavirus

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