Bharati Vidyapeeth College of Engineering

Sector-7, C.B.D. Belapur, Navi Mumbai-400-614

A REPORT ON

Recession Due to Covid-19 Pandemic

Submitted to:
Asst. Prof. Anuradha Shukla
DEPARTMENT OF APPLIED SCIENCE AND HUMANITIES

Submitted by: Students of TEET- B Electronics and Telecommunication (2020-21)

MIS NO. NAME
18131070 Subhranil Sengupta
18131072 Julfikar Shaikh
18131073 Rohit Sharma
18131084 Tanmay Singh
18131087 Pranali Sontate
18131088 Muskan Srivastava
19132040 Shivani Sinha
19132045 Deven Satam
RECESSION DUE TO COVID-19 PANDEMIC
 Bharati Vidyapeeth College of Engineering
Sector-7, C.B.D. Belapur, Navi Mumbai-400-614

CERTIFICATE
This is to certify that the following students of Third Year Department of Electronics
and Telecommunication Engineering have successfully completed a report on
RECESSION DUE TO COVID-19 PANDEMIC in partial fulfilment of the course
(Business Communication and Ethics) as prescribed in the syllabus by the University
of Mumbai.

Submitted by Electronics and Telecommunication TEET-B (2020-21)

MIS NO. NAME
18131070 Subhranil Sengupta
18131072 Julfikar Shaikh
18131073 Rohit Sharma
18131084 Tanmay Singh
18131087 Pranali Sontate
18131088 Muskan Srivastava
19132040 Shivani Sinha
19132045 Deven Satam

(Asst Prof Anuradha Shukla) (Prof P.A Kharade) (Dr Sandhya Jadhav)
Guide HOD
Principal
 Acknowledgement
We would like to express our deepest appreciation to all those who provided
us the possibility to complete this report. A special gratitude we give to our
guide Asst. Prof. Anuradha Shukla, whose contribution in stimulating
suggestions & encouragement, helped us to write this report. We also thank
her for elevating inspiration, encouraging guidance & kind supervision in
completion of this project.
Furthermore, we would like to acknowledge with much appreciation the
crucial role of Principal Dr Sandhya Jadhav and our Head of department Prof. P.
A. Kharade, whose guidance helped us in completing the task at various stages.
A special thanks to our whole team who conducted local survey and also
gathered information via many sources and articles through online mode
during this period.

Table of Contents
SR NO TABLE OF CONTENTS PG NO

1 Introduction 7

2 Objectives 8
3 What is recession 8
4 What causes recession 9
5 Strike on Global and Indian Economy due to COVID-19 10

6 Stock market crash 12

7 Impact on countries 14
8 Unemployment 16
9 Macro Effects of COVID-19 on the Manufacturing 18
Sector
10 Collapse of various industries 22
11 How small business were affected 23
12 Telecommunication Industry 24
13 Conclusion 25
14 References 26
INTRODUCTION
A prolonged global recession due to COVID-19 pandemic, high
unemployment, another outbreak of infectious disease and
increased protectionism are among the biggest worries for
companies around the world, as this pandemic is wreaking havoc on
the global economy, unleashing the worst economic downturn since
the Great Depression.
As per the study, two-thirds of respondents identified a "prolonged
global recession" as a top concern for business. Besides, one-half
identified bankruptcies and industry consolidation, failure of
industries to recover and disruption of supply chains as crucial
worries.
Individuals infected by the Covid-19 potentially are at risk of health
and economic well-being. Today, the Covid-19 is a global issue, and
the world economy can be interpreted as almost at the standstill. In
this context, this study aims to discuss the potential first reactions of
short and long term global economic impacts of the pandemic
through sectors by assessing the data through graphs. In addition,
this study tries to put forth possible economic scenarios for the post-
pandemic world.
This is a review description that summarizes the current reports and
discussions about the economic consequences of this remarkable
event, and tries to make some inferences considering them.
It takes a while for the world economy to recover from the
contraction. It seems that this pandemic will lead to a permanent
shift in the world and its politics, especially in health, security, trade,
employment, agriculture, manufacturing goods production and
science policies. Since this new world might provide great
opportunities for some countries that did not dominate world
production before, governments should develop new strategies to
adjust the new world order without much delay.
Objectives:

The purpose of writing this report is,

1.To make a diagnosis about the impact of the Covid-19 Pandemic
on global trends and challenges faced by organizations in both the
sectors.
2.To examine the recent decline in oil prices along with sudden
destruction of tourism economy.
3.Unanticipated slump in stock market which has led to the collapse
of various industries, leaving people unemployed.
4.To explain the opportunities gained by medical fields, Health
insurance companies along with companies who made great stand
by manufacturing P.P.E Kits and other medical equipments.
5. Also to explain the benefits gained by telecom market.

What exactly is recession?

Recession is an economical term which refers to a decline in general
economy. In other words, recession could be stated as massive
slowdown in the economic activities or drop in demand. This usually
happens when there is a surplus of production and scarcity of
demand. Markets usually self-correct this by reducing the market
price but when the extent of the surplus and scarcity is much more
than the market's ability to self-correct, then it could be stated as
recession.
Massive drop in prices or deflation is usually precursor to a
recession, which is why a low rate (2 to 3%) of inflation is usually
considered healthy for the economy.
What causes recession?
This may occur due to various events like financial crisis, trade or
supply shock or a natural or anthropogenic disaster. There have been
various numerical theories that attempts to explain the cause of
recession. The theories are broadly classified into 3 types i.e. real
economical, psychological and financial factors.

Commons Causes of Recession:

High Interest Rates
Stock market crash
Manufacturing slowdown
Deflation

History of recessions:
The Great Depression (1929)
Black Monday (1987)
The dot-com crash (1999)
The Great Recession (2008)
The Coronavirus crash (2020)

Strike on Global and Indian Economy due to COVID-19

The COVID-19 disease has spread at a rapid speed, affecting millions
of people all over the world, bringing the economic activities at a halt.
This has been one of the largest economic shocks that the world has
faced in decades. With restrictions of movement, the economy of
almost every country has been heavily affected.

The above figures indicate that there has been a decline of 4.9 percent to the
global economy. As per experts, a deeper recession is expected in 2020 followed
by a slower recovery in 2021.

Talking about India, with the implementation of lockdown, the

country’s economy is at a halt. The Indian GDP is likely to shrink by
4.5% in 2020 due to the pandemic. As per Ministry of Statistics, India’s
growth went down by 3.1% in the financial year 2020. It is reported
that India has seen the lowest figures of growth in the past 3 decades.
CRISIL announced that this could be India’s worst recession since its
Independence.
The unemployment rate rose from 6.7% on 15 March to a whooping
26% on 19 April. It is estimated that about 140 million people have lost
their jobs during the lockdown period, while salaries have been cut
down for many. More than 50% of the business were affected, supply
chain was at rest due to the lockdown restrictions. The daily-wage and
informal sectors are said to be the most affected ones in the lockdown
period. Despite the efforts by the government, there has been a
significant decrease in the economy of the country.
Major companies in India have either temporarily suspended or
reduced their operations. Start-ups have been impacted as funding
have fallen. Stock markets had their worst loses on March 23, 2020.
The government of India, announced a variety of measures and
schemes to tackle the situation, but still the decline shows no
improvement as of now.

Stock market crash

Global economic lockdown and lower demand of product and
services are considered to be the main cause of the market crash.
Due to lower demand of product and services, there has been a
significant drop in the stock prices.

The sentiment in the stock markets across the world is gloomy. This
is reflected in the frequent crashes in the share markets in all parts
of the world. Financial markets are witnessing sharp volatility
currently as a result of the fallout in global stock markets. The fall is
in line with the global benchmark indices as the domestic market
usually tracks the major global indices and the high volatility is likely
to continue in the near future. Further, with overseas investors (FPIs)
flying to the safety of dollar-backed assets from emerging markets
has led to a sharp downfall in the Indian Stock Market. S&P BSE
Sensex which was 42273 points on 20 January, 2020 is 29894 points
on 08 April, 2020 and further decreasing. The price to Earnings Ratio
of Sensex is less than 18 (P/e is 17.81 on 31March, 2020) which is far
less than the historical range between 20-24. Markets across large,
mid, and small caps have corrected sharply from their peaks. In the
FY20 the mid-cap index fell by 26 per cent while the Sensex fell by 22
per cent.
On 12 February, the Dow Jones Industrial Average, the NASDAQ
Composite, and S&P 500 Index all finished at record highs (while the
NASDAQ and S&P 500 reached subsequent record highs on 19
February). From 24 to 28 February, stock markets worldwide
reported their largest one-week declines.
The market always looks at the future. At the current level of the
Sensex, the Street is discounting that India will be current account
surplus in FY21 due to lower oil imports, lower gold imports, and
reduction in imports from China. Mathematically when you fall from
100 to 10, it is a drop of 90%. When you bounce from 10 to 20, it is a
jump of 100%, even though you are down 80% from the top. Small
caps were at one stage down 65% from the top. They had fallen too
much, expecting companies to shut down. They have bounced back
as their fears have been proven unfounded. Thus, this gradual
downfall has turned into a spectacular hell for those who think that
markets do grow to the skies it could go up a long way in price but it
won’t go long in time.
Impact on Countries
The world economy will go into recession due to the
coronavirus pandemic, with the exception of India and China,
according to a latest United Nations trade report. Two-thirds of
the world living in developing countries are faced with
unprecedented economic damage, United Nations Conference
on Trade and Development said in its new analysis, calling for a
$2.5 trillion rescue package for these nations.

The world bank group one of the largest sources of funding and
knowledge for developing countries, is taking broad fast
action to help developing countries strengthen their pandemic
response. We are supporting public health interventions,
working to ensure the flow of critical supplies and equipment,
and helping the private sector continue to operate and sustain
jobs. We will be deploying up to $160 billion in financial
support over 15 months to help more than 100 countries
protect the poor and vulnerable, support businesses, and
bolster economic recovery. This includes $50 billion of new IDA
resources through grants and highly concessional loans.
 Long-term damage to potential output-
The June 2020 Global Economic Prospects looks beyond the
near-term outlook to what may be lingering repercussions of the
deep global recession: setbacks to potential output.
Efforts to contain COVID-19 in emerging and developing
economies, including low-income economies with limited health
care capacity, could precipitate deeper and longer recessions⁠—
exacerbating a multi-decade trend of slowing potential growth
and productivity growth.

Data key and effect on every fields in different countries-

Each of the reserve’s regional banks and their branches also regularly
research economic activities within each of their areas, gathering
data for the bank’s Beige Book and Federal Reserve Economic
database and publishing regular reports on their research through
each bank’s website.
The Oklahoma City branch and its team, for example, routinely
evaluate the energy, agriculture, aviation and transportation
segments of Oklahoma’s economy and how those impact its 4 million
residents. Seven years of growth in jobs was lost by Oklahoma’s
economy in March and April, followed by a slight improvement in
May

Unemployment

Things are entirely different in the world of the real economy, which
slumped enormously. You can see how bad this recession is by
looking at the following figures. GDP has plummeted, and
unemployment rates have soared to historic levels.

The pandemic and subsequent lockdowns have resulted into mass

unemployment, especially in the month of March and April. It is
estimated that due to the spread of the diseases, 147 million people
have lost their jobs worldwide while salaries have been cut down for
many.
Due to supply chain disruption, many companies have reduced their
man power resulting into unemployment at a large scale.
Among all other countries, United States has seen a huge increase in
the unemployment rate as over 26 million people have claimed of
losing their job.
Indian Labour Organization (ILO) has estimated that more than 25
million jobs have been threatened due to the spread of the disease
globally.
Macro Effects of COVID-19 on the
Manufacturing Sector:1

Manufacturing industries could be said as the worst hit sector during

the pandemic. It had brought many manufacturing industries to a
still, resulting into supply chain disruptions coupled with declining
industrial activity are expected to sink the sector’s revenue 18.1% in
2020 alone.
According to a survey, 80% of the manufacturers are estimated to be
affected by the pandemic due to,
1. Lessened demand for high-value durable goods, such as
primary metals, industrial machinery and automobiles.
2. Disruption in labour supply and mandated closures of some
facilities has been the primary cause of the sector’s decline.
All manufacturing industries were affected by the crisis. The share of
countries that experienced a decrease in manufacturing varies from
55 per cent (pharma) to 94 per cent (motor vehicles) due to which
pharma is identified as one of the very few “winners”, while motor
vehicles is (and continues to be) one of the biggest “losers”. This
demonstrates that the negative trend continued into April across all
industries, even though some industries, such as pharma, seem to be
slightly less affected than other more vulnerable industries.
Below Figure shows the Share of countries (%) registering a decrease
in industrial production over the period March – April 2020 in different

industries

Now, highlighting the drop-down into wider picture supply chain

disruptions has been the sector’s greatest challenge globally.
Beginning with China in early 2020, widespread shutdowns of
Chinese manufacturing facilities due to quarantine mandates caused
a ripple effect across the global economy. During this period,
industries with high trade exposures to China struggled to maintain
operations.
Let's brief it with example,
In US, automobile manufacturers (33611a) struggled to secure
steering components originally sourced from Chinese manufacturers,
thus causing delays. This is just one example of many other
disruptions that have caused manufacturers to idle production and
rethink the resilience of their supply chains.
 • The above expected data shows that global manufacturing will
be contracted by 7.5% in 2020.
• The recovery is expected to take some time with manufacturing
not expected to exceed 2019 levels until 2022.
• The global machinery market will shrink in excess of 11% in
• 2020.
• Global industrial production is expected to lose close to $2.8
Trillion of value.
• One of the hardest hit industries is Automotive production
which is unlikely to recover properly until after 2024.
• Aerospace will be similarly hit which is expected to contract
over 21% in 2020 due to a collapse in demand for air travel
during peak times.
• Food & Beverage production will perform best out of the
industrial production industries, expecting to grow around 0.5%
globally in 2020.
• Of the top 10 largest MIO regions china will recover quickly
however is expected to shrink 3.9% in 2020.
• Germany will be the slowest to recover of its top 10 due to its
exposure to the automotive industry and reliance on exports.

How Covid-19 is Reshaping the Pharmaceutical Industries?

Just like a coin has two sides, similarly this reshaping is also
divided into two aspects where one is positive and other one is
negative.
First, let’s start with positive side;
Unlike the other industries, the pharmaceutical industry has seen a
positive impact, on an overall basis, on its growth in this year. The
market expectations are on similar lines as indicated by the stock
prices which for many pharma companies had risen by 20-30% in
Apr’20 compared to the Q3FY20 period. But still the situation varies
according to the portfolio and size of the companies. Some of the
small companies are finding themselves under stress and are
becoming a source of the additional capacity that the larger players
with deeper pockets are looking at.
Now, if we look at the negative side it shows that
The manufacturers of medical devices, pharmaceuticals, and lab
equipment such a medical crisis is a double-edged sword. On the one
hand, the demand for many medical products rises. Higher demand
means more business in a battle to help save lives. On the other
hand, a crisis on such a large scale has a significant impact on the
supply chain for manufacturers across industries. The growing
dependence on equipment, raw materials and even packaging
manufactured in Asia is driven by the low prices offered here. For
many industries China has become a critical player in the process of
manufacturing.
Mounting prices for masks and protective gear highlights how these
repercussions are being felt around the world, even FDA has
announced shortages in drugs and products as a result of supply
chain caused by the crisis. Thus, such shortages only serve to
compound the problem, as well as the panic.

How the current condition triggered Food and Beverage

Companies?
• Suffered 22% loss, globally. As this sector is segmented into
online food chains and offline food chains. Therefore, the
outbreak of COVID-19 had a dual impact on these segments.
• The offline food chains that are restaurants and cafes are
entirely shut down in some regions, whereas, online food
deliveries are available.
 • In addition, packaged food and beverage industries are
witnessing an upsurge in the demand, such as shelf-stable
foods and beverages including milk products, as consumers
rush to stock the pantries.
• The food & beverage industry includes the companies working
in processing raw food materials, packaging, and distribution
which include prepared foods and packaged foods, along with
alcoholic and non-alcoholic beverages. Due to reduced man
power, scarcity of raw materials and locked factories there is
reduction in production.
• The prominent players operating in the global food & beverage
industry includes Starbucks Corp., McDonald's Corp., Subway,
Burger King, KFC, Home Original Chicken, Dunkin' Donuts, Dairy
Queen, Papa John's Pizza, The Coca-Cola Co., PepsiCo etc. Due
to the outbreak of this pandemic, these companies are largely
affected, especially in the outbreak zones.

Collapse of various industries:

Travel Industry:
This industry has been badly affected by this pandemic as significant
reductions in passenger numbers has resulted in flights being
cancelled and airlines been grounded. This in turn massively reduced
revenues for air lines and forced many airlines to lay off employees
or declare bankruptcy.
Tourism:
Unprecedented global travel restrictions and stay at home orders are
causing a high slump for tourism industry. Depending on duration of
crise revised scenarios indicate that 60-80% loss could be faced by
international tourism economy for the year 2020
Film Industry
Across the world and to varying degrees, cinemas have been closed
due to which the global box office dropped by billions of dollars. As it
contributes almost one-third of the estimated $136 billion in the
value of worldwide movie production and distribution.

Automobiles:

Automobile and its component manufacturing plants are being

shuttered around the world, consumer footfalls in showrooms has
fallen sharply, vehicle sales are dropped dramatically and almost
every major industry event is being cancelled.

Hospitality:
Several measures to contain the spread has resulted in temporary
closure of may hospitality businesses. Orders issued by authorities
led to sharp decline in hotel occupancies and revenues.

How small business were affected

The pandemic has affected both small and large businesses, but the
smaller ones are said to be the most affected ones.
Smaller the company, higher is the hit of the recession. These
companies are suffering lack of cash flow and capital resulting into
major loss. As per surveys, every 3 out of 4 small business owners are
said to be affected by the pandemic. Reduction in customer demand
is said to be the major reason for it. Retail and hospitality business
are the most affected ones as there is a significant decrease in
customer's demand. Surveys also states that the companies with less
than 100 employees were the first to reduce its manpower and
implement layoffs.

Some shimmers of hope in the sky

Besides all the other sectors, telecom sector has made a great stand
in this destruction which is showing the sign of hope and support to
the countries worldwide.
Telecommunication Sector:
Although the novel corona virus has brought the global economy at
halt, the telecommunication sector has been unaffected by the
pandemic.
The telecom sector has not only helped economically, but also social
sectors like health and education which are now heavily dependent
on this sector.
From the past few years, telecom sector has been into a rough patch,
but it has made us realise its importance in our day to day lives.
During lockdown period where people were away from their known
ones this sector brought them together and made communication
easier.
Talking about India, the telecom sector contributes around 30-35% in
the country’s GDP but in lockdown period over 54% of total services
was contributed. It has been directly contributing around 6% in the
country’s GDP and during the lockdown period, it is said to be gone
up by 5 times.

Survey Questions-
Impact of Covid-19 on Informal sector in India. And what
are the challenges the labour were facing?
Covid-19 disbalanced Indian Economy and left workers with no job in
hand. No doubt that it affected all sectors of the economy and make
the things critical for future. India with all its efforts, working hard to
curb the spread of virus. Small workers are in big trouble due to the
pandemic and individual who earn on daily basis to feed themselves
and their family have surrounded by the problem of finance.
Towards looking to the causes want to do research on the impact of
pandemic on informal sector as well as for the small enterprises.

How Pandemic Corona Virus may Impact the Agriculture

Sector and Farmers Income?
Since Novel Corona Virus Disease 2019(nCOVID-19) is causing
lockdown of Cities and Countries, there may be chances (Already
Visible) of reduced demand for fruits and vegetables in Peri Urban
Agriculture for the standing crop and there would-be drop-in
production in the upcoming season if this pandemic continues for
few more months.

Conclusion
As a conclusion, it is expected that pandemic will provide some
economic and political opportunities to some countries if they
manage to end the virus earlier. According to the discussions
presented in this study, we summarize possible economic threats
and opportunities for the post-pandemic world. It seems that the
Indian economy will be destroyed in the short term like the many
other countries but if the country can manage to control the virus
soon, this would bring sustainable growth with the accelerating rise
in manufacturing exports, tourism revenue and foreign investment in
the short term. In addition, the world will not be the same in the
post pandemic era due to the changing sensitivities in the social life
or production mechanisms or governance of countries, as stated
above. Hence, country must develop new strategies to adjust the
post pandemic new world order without much delay to gain
advantage or not to be left behind.

Webliography:
• Economic times (https://economictimes.indiatimes.com/)

• Wikipedia (https://www.wikipedia.org/)

• International Labour )Organization (https://www.ilo.org/global/lang--

en/index.htm)
• Business – Standard (https://www.business-standard.com/)