IMPACT OF COVID-19 ON GLOBAL ECONOMY

WITH SPECIAL REFERENCE TO INDIA

A
THESIS
SUBMITTED TO
THE ICFAI University Dehradun
IN PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR THE AWARD OF THE DEGREE OF
DOCTOR OF PHILOSOPHY (Ph.D.)
IN
MANAGEMENT

BY
Rajiv Sethi
(Enrollment No: RSIBS190076)

Under the Supervision of

Dr. Ankita Srivastava

ICFAI Business School

The ICFAI University,
Dehradun

2022
 Table of ConTenTs
List of Tables i-ii

List of Figures iii

Executive Summary iv

Chapter 1 Introduction 1-21

1.1 Introduction 1

1.2 Background of the Study 4

1.2.1 State-wise Evolution of COVID-19 5

1.3 The Current Global Scenario 10

1.4 The Current Indian Scenario 15

Chapter 2 Literature Review 22-45

2.1 Effects of Previous Pandemics on the World Economy 22

2.2 COVID-19 Pandemic's Effect on the World Economy 25

2.3 Research Gaps 45

2.4 Research Objectives 45

Chapter 3 Research Methodology 46-53

3.1 Research Design 46

3.2 Research Methodology 46

3.3 Objective 1: To measure the spread of COVID-19 cases 47

in different economies of world
3.4 Objective 2: To analyze the impact of COVID-19 on 48
global economy

3.5 Objective 3: To analyze the impact of trade and 49

consumption on Indian economy during COVID-19

3.6 Objective 4: To suggest an integrated framework to 52

combat COVID-19 pandemic
Chapter 4 Data Analysis 54-87

4.1 To measure the spread of COVID-19 cases in different 54

economies of the world
4.2 To measure how much the global economy has been 59
impacted by COVID-19
4.2.1 Impacts at Macroeconomic level: Global 60
productions, imports and exports
4.2.2 Impacts at Microeconomic level 61

4.2.3 The detrimental effects of COVID-19 63

4.2.4 Beneficial impact of COVID-19 69

4.3 To analyze the impact of trade and consumption on 76

Indian economy during the COVID-19
4.4 To elucidate a comprehensive framework to battle the 81
COVID-19 pandemic
4.4.1 Social interventions 81

4.4.2 Economic Interventions 82

4.4.3 Technological Interventions 83

4.5. Conceptual Framework to Decrease the COVID-19 86

Impact
Chapter 5 Results and Findings 88-99

5.1 Effects on the macro economy of global output, exports, 90

and imports
5.2 90
Microeconomic Effects

5.3 The Damaging Effects of COVID-19 91

5.4 COVID-19's Advantageous Effects 93

Chapter 6 Conclusions and Recommendations 100-119

6.1 Economic Reactions to COVID-19 100

 6.1.1 Increasing Disparities among Nations 100

6.1.2 The Crisis's Immediate Responses from the 101

Governments
6.1.3 Growing Dangers to a Fair Recovery 102

6.1.4 Elevated Inflation 103

6.1.5 Changing Interest Rates 104

6.1.6 NPA Expansion in the Banking Industry 104

6.2 Indian Govt.’s Steps to Ease the Economy 105

6.3 Framework 107

6.3.1 Community Interventions 107

6.3.2. Technical Developments 111

6.4 Discussion 115

6.4.1 India's COVID-19 Situation 115

6.5 Limitations of the Study and Scope of Future Work 116

6.6 Policy Implications and Recommendations 117

List of Publications 120

Appendix A: Normality Test 121

Bibliography 122-137
 LIST OF TABLES
Table No. Description Page No.
1.1 Outline of India's Population and Public Health Care System 04
1.2 State-By-State Comparison of India's Public and Private 07
Health Systems
1.3 Pandemics and deaths 12
3.1 Variables 50
4.1.1. Tests of Normality 55
4.1.2. Kruskal Wallis Test of Anova 55
4.1.3. Test of Homogeneity of Variance 56
4.1.4. Robust Tests of Equality of Means 56
4.1.5. Post hoc Analysis 58
4.3.1 Unit Root Test 76
4.3.2. OLS 77
4.3.3. Multiple breakpoint tests 79
4.3.4. Multiple breakpoint tests 80
4.4.1. Mandatory Social Behaviors 82
6.1. Govt. Interventions listed in India 108
6.2. Economic Interventions: Cost to society of COVID-19- 109
related fatalities
6.3. The Indian government's introduction of economic aid 110
measures
6.4. Amendments in medical export policy 112
6.5. Developments in technology taken in reaction to COVID- 114
19

i
 LIST OF FIgurES
Figure No. Description Page No.
1.1. Within the initial 100 days, the outbreak evolved and 06
expanded throughout the states
1.2. Percentage Change in Share Value 12
1.3. Stock Market Movements 13
1.4. Yearly Unemployment Rate Change from 2019 to 2020 14
1.5. Real GDP Growth 15
4.1.1. Number of COVID-19 Cases 54
4.2.1. Based on the Harmonized Commodity Description and 62
coding system from 2018, where export volume is
denoted by dot sizes in millions of USD, the figure
summarizes how various Eastern European and
Mediterranean nations have advantages over China on
particular exports; Source: Javorcik (2020)
4.2.2. Impact of past disease outbreaks on aviation 67
(Air Transport Bureau, 2020).
4.2.3. The impact of COVID-19 on tourism in quarter 1of 2020. 68
Provisional data but current as of 31st August 2020
(UNWTO, 2020).
4.2.4. From January 1–20, 2020, through February 10–25, 2020, 70
China had average nitrogen dioxide (NO2) concentrations,
which are shown in the upper part. Comparing the March-
April averaged amounts from 2019 to the lower half's
depiction of NO2 concentrations across Europe from
March 13 to April 13, 2020 (ESA, 2020; NASA, 2020a).
4.2.5. Annual rate of change in primary energy demand, since 72
1900, with key events impacting energy demand
highlighted (IEA, 2020).
4.2.5. Global energy-related emissions (top) and annual change 74
(bottom) in GtCO2, with projected 2020 levels
highlighted in red. Other major events are indicated to
provide a sense of scale (IEA, 2020).
ii
4.2.6. Global generation % shares from coal (red line) and low- 75
carbon sources (shaded area), including nuclear (yellow)
and all renewables (different shades of green). Source:
IEA
4.3.1. Normality Test 78
4.3.2. Line Graph for Structural Break 78
4.4.1. Social behavior and its outcome 78
4.4.2. Economic Interventions 84
4.4.3. Suggested Inclusive Conceptual Framework 87
6.1 Rate of Unemployment 105
6.2 Comparing India’s COVID-19 recovery rate to those 111
of the top five affected regions (2020)
6.6. Pillars 118

iii
 EXECUTIVE SUMMARY

There has been a long past of distress of pandemic outbreaks. Infectious diseases
are one of the major causes of death responsible for the quarter to one-third of the
mortality worldwide. The COVID-19 outbreak is a sharp reminder that
pandemics, like other rarely occurring catastrophes, have happened in the past and
will continue to happen in the future. Even if we cannot prevent dangerous viruses
from emerging, we should prepare to dampen their effects on society. The current
outbreak has had severe economic consequences across the globe, and it does not
look like any country will be unaffected. This not only has consequences for the
economy; all of society is affected, which has led to dramatic changes in how
businesses act and consumers behave. The COVID-19 pandemic’s toll on
economic activity in past two year is only the beginning of the story. While the
rapid and unprecedented collapse of production, trade, and employment may be
reversed as the pandemic eases, historical data suggest that long-term economic
consequences could persist for a generation or more.
A statistical test of the information always helps us to build the fact. This
thesis while measuring the economic impact of global economy, also attempted to
measure its impact on Indian economy. The present work focuses mainly on India
as it’s a developing nation and is the world's second-most populous and the third-
worst affected country by COVID-19 to date (in terms of the total number of
confirmed COVID-19 cases). More the population, more are the chances of spread
of the infectious diseases. COVID-19 spread has been tested in global economies
using the data on the basis of income i.e., upper income, upper-middle, and lower-
middle and lower income economies. The study interestingly found that the spread
was more in high income and upper middle-income countries. It was interesting
from the perspective that these countries are considered to be well versed in health
infrastructure and education of people. But they were severely affected. The other
things which were affected were the transportation, hospitality and hotel industry
and to some extent all the industries were suffering. The reason was the change in
the consumption pattern of nations and restrictions on the movement of goods.
This has been again verified for India using regression analysis. The impact on
GDP was measured and it was found that the growth of economy (GDP) got really
affected due to change in the trade and consumption of people.

iv
 The study also suggested a comprehensive framework to combat the
pandemic. This framework included, social, economic and technological
intervention in order to survive and come out of this pandemic. The spread of
COVID-19 in India has tested the country's pandemic preparedness in terms of its
health infrastructure, technological capabilities and policy interventions.
The countries globally should take lessons from these ongoing pandemic
and come out with more preparations.