2ND WAVE OF COVID 19 AND ITS

IMPACT ON INDIAN ECONOMY.

PRESENTED BY – MIFTA HAFIZ

ECM58
 THE BEGINNING

• The covid 19 pandemic is a part of worldwide pandemic of coronavirus disease 2019 caused by SARS-COV-2
[SEVERE ACUTE RESPIRATORY SYNDROME].
• FIRST CASE- Reported in Kerela on jan 30 th 2020
• India 2nd with highest number of cases, 3 rd highest deaths.
• More than 86.16 lakh vaccines administered till June 21 st.
• G7 summit- india sought support to uplift patent protections on vaccines.

• CNTD
WHY THE SECOND WAVE WAS MORE DANGEROUS

DOUBLE MUTANTS AND TRIPLE MUTANT STRAINS

LARGER POPULATION DENSITY ,HIGHER CHANCES OF REPLICATION,

MUTATION.

POOR EXECUTION BETWEEN CENTRE AND STATE.

DOUBLE MUTANT- LESS AFFECTED BY VACCINE.

PATIENTS IN FIRST WAVE – 60YRS ABOVE, 2 ND WAVE YOUNGER PEOPLE
GOT INFECTED.
• Governments response in 2nd wave

• THE GOVT. Approach in dealing with the two waves has been different.
• First wave- CENTRALISED
• Second wave- LOCALISED Partly due to economic compulsions.
• Central institutions AIMS, ICMR acted merely as advisory for public health of states.
• Govt. spending came down to 4.8% than last year. [ higher than pre covid by 7%]
• No such taali bajao and thali bhajao as well as lightening of lamps was practiced, it was
officially taken serious.
• SBI slashed the country fy22 growth forecast to 7.9 from 10.4%.
CONCLUSION
EFFECT ON DIFFERENT SECTORS

• AGRICULTURE
• NITI ayog member – no impact on agriculture, [partly true].
• Rural areas got seriously involved with virus.
• Rabi season was impacted
• Local mandis were closed, hence crop rot in the fields.
• Shrinking of female force participation- affected sowing operations 80% of farm work undertaken by women.
• Good monsoons, easing of supply , good kharif season .
• But data proved it- 4.5% growth in agriculture, 3.6% last year.
• Inflation in pulses rose to 9.41%, onion – 62.78% , vegetables was 13.3%.
• Aggregate business of mandis across j$k has not got affected due to the covid 19 lockdown but performed better.
[ more by 3,000 tonnes than pre covid.]
 MANUFACTURING.

• Reported with higher production in first quarter.

• Growth has been curbed.
• During the first quarter manufacturing went up nearly 50%
• Cost burdens and stagnant employment in manufacturing – weak demand
• Higher production costs as well due to higher fixed costs.[raw material scarcity and transportation costs]
• Growth in new orders softened [ cost burdens passed on cusumers].
• The PMI stood at 52.3 in august down from 55.3 [ score above 50 – expansion]
• Food inflation was 1.29% in august, fuel and power inflation was at 26.09%
• Manufactured products inflation rose to 11.39% from 11.20% in July.
SERVICES

• Services with maximum share in india’s GDP- 57%

• Services sector reduced workforce numbers again in May.
• Rise in input prices and fuel- small proportions of firms shared cost burdens with clients.
• No increase in mark-up’s
• Services are more contact intensive
• But managed better in 2 nd wave, IT services gained pace [Digital transformation of companies]
• Travel, Education and tourism industry worst affected, multiplexes in malls.
• Insulated segments- food and grocery retailers, hospitals , diagnostic chains, insurance companies.
• Telecom companies, online service providers, home delivery
EDUCATION

• Drop outs
• Online education – the only possible alternative yet an impediment
• Struggle to obtain gadgets
• No access to libraries
• Gap between teachers and students interaction.
• Digital world a dilemma for a lot of teachers.
• More number of suicide cases due to uncertainity, postponement or delay in exams
• Education institutions moved toward blended learning.
• Payment of fees was poor, low budget schools shut down.
• The learning through mixed culture and interaction got hampered too.
 AUTOMOBILES

• 40% cut in production announced by Maruti for September

• Semi conductor chip shortage has impacted production .
• Commercial vehicles will see a recovery due to improvement in freight rate.
• Rose on an average 4.5-5% in august, highest since aug. 2019 [ higher exports and
increased cargo offering ].
• Fall in two wheelers due to increased demand of Evs.
• Fall in demand also due to increased fuel prices.
ELECTRICITY CONSUMPTION IN 2020

august
april
march
february
december
0
500
1000
1500
2000
2500
3000
3500
4000
4500

Series 3
GDP GROWTH MOMENTUM.

• 8 crore industries and index of industrial production have shown recovery to pre pandemic levels.
• Overall economic impact is unlikely to be very large
• Indian economy grew 1.6% in 4th quarter of 20-21 fy, while full year GDP shrunk by 7.3%,[ worst
in 40 yrs]
• Quarter 1st GDP meets estimates
• 20.1% growth , 10% below 2019 levels.
• Anticipated growth by RBI- 10.5%
• Downgraded by global agencies like moody’s
• Initial prediction-13.7, lowered- 9.3%
FOREIGN EXCHANGE

• Foreign exchange soared by $8.895 billion [ recorded $642.558 billion as on 3rd

september
• IMF made an allocation of SDR 12.57 billion [ around $17.86 billion ] to india on 23rd
august 2021.
• Country’s reserve position with IMF increased by $11 mn to $5.121 billion.
• Gold reserves rose by $642 million to 38.083 billion.
• Indian rupee settled with a marginal gain of 4 paise.