IMPACT OF COVID-19 ON INDIAN ECONOMY

BY

LABONITA CHATTERJEE -073

SOHINI CHAKRABORTY -116
SONALI PATIKAR - 052
RUCHIRA DAM ROY - 088
SUZZAINE AHAMED - 084
ANKITA AGARWAL -
 INTRODUCTION
•The impact of Coronavirus pandemic on India has been largely disruptive in terms of
economic activity as well as a loss of human lives. 

• India has been hit hard by the pandemic, particularly during the second wave of the
virus in the spring of 2021. The sharp drop in GDP is the largest in the country’s
history.

• Almost all the sectors have been adversely affected as domestic demand and
exports sharply plummeted with some notable exceptions where high growth was
observed.

• From April to June 2020, India’s GDP dropped by a massive 24.4%.

• The fact that India’s growth rate in 2019 was among the highest makes the drop due
to Covid-19 even more noticeable.
 HOW HAVE DIFFERENT SECTORS BEING AFFECTED DUE TO COVID 19?

The sectors that have been affected due to covid 19 are as follows:-

• Healthcare sector: The healthcare sector is at the epicentre of this unprecedented

global pandemic challenge, and the private sector has risen to the occasion, by offering to
the government all the support it needs, be it testing support, preparing isolation beds for
the treatment of Covid-19 positive patients or deploying equipment and staff in identified
nodal hospitals.
•Hospitality Sector: The hospitality sector includes many businesses like restaurants,
beds and breakfast, pubs, bars, nightclubs and more. The sector that has contributed to a
large portion of India’s annual GDP has been hit hard by restrictions and curfews imposed
by the states.
•Tourism Sector: The sector that employs millions of Indians started bouncing back after
the first wave, but the second wave of covid was back for the devastation! The tourism
sector contributes nearly 7% to India’s annual GDP. The restrictions due to the second
wave have crippled the tourism sector, which was already struggling to recover from the
initial loss suffered by the businesses in 2020.
•Real Estate and Construction sector:The real estate and construction activities have
started facing a disruption during the second wave as a large number of migrant workers
have left the urban areas.
•Agriculture sector
 HOW COVID 19 IMPACTED ON THE INDIAN ECONOMY IN
HEALTHCARE SECTOR?

•While the private healthcare sector is fully prepared for every eventuality, it is also a reality
that, unlike other sectors, the sector is facing a twin-burden: (a) Investing additional
manpower, equipment, consumables and other resources to ensure 100 per cent
preparedness for safety in the hospital(s) and eventual treatment of patients, if needed. (b)
Experiencing a sharp drop in OP footfalls, elective surgeries and international patients.

•The industry has been witnessing loss of business and this trend is expected to continue for
the foreseeable future (at least 3-6 months), and the fact that the sector’s costs are
predominantly (around 80 per cent) fixed, it is expected that there will be losses and severe
impact on cash flows.

•The medical devices industry has also taken a hit. The country imports consumables,
disposables and capital equipment including orthopaedic implants, gloves, syringes,
bandages, computed tomography and magnetic resonance imaging devices from China. Due
to the current crisis in China, the medical device manufacturers across India are finding it
difficult to source important raw materials and electronic components from Chinese
factories.
•Even though some of the factories in China have restored operation, shortage of some
critical electronic parts and raw material still exists. This is adversely affecting the
margins and profitability of Indian companies importing medical devices and small
components to manufacture finished products. This can also put upward pressure on
prices of medical devices in the short term.

•Also the pharmaceutical industry has been on the rise since the start of the Covid-19
pandemic, especially in India, the largest producer of generic drugs globally. With a
market size of $55 billion during the beginning of 2020, it has been surging in India,
exporting Hydroxychloroquine to the world, esp. to the US, UK, Canada, and the
Middle-East.
 How Has Covid-19 Changed Income, Consumption,
Poverty And Unemployment In India?

•Both wealth and income inequality has been on the rise in India. Estimates suggest that in
2020, the top 1% of the population held 42.5% of the total wealth, while the bottom 50%
had only 2.5% of the total wealth. 

• During India’s first stringent national lockdown between April and May 2020, individual
income dropped by approximately 40%. The bottom decile of households lost three
months’ worth of income.

• Microdata from the largest private survey in India, CMIE’s ‘Consumer Pyramids
Household Survey’ (CPHS), show that per capita consumption spending dropped by more
than GDP, and did not return to pre-lockdown levels during periods of reduced social
distancing.

• Average per capita consumption spending continued to be over 20% lower after the first
lockdown (in August 2020 compared with August 2019), and remained 15% lower year-on-
year by the end of 2020.

• An estimated 230 million people in India have fallen into poverty as a result of the first
wave of the pandemic.
•The percentage of poor people in the second lowest quintile of pre-Covid-19
consumption jumped from 32% to 60% within a year. This was driven largely by rural
areas, where the headcount ratio for the second quintile almost doubled.

• Post-pandemic, the number of poor in India is projected to have more than doubled
and the number of people in the middle class to have fallen by a third.
The pandemic has brought severe economic hardship, especially to young individuals
who are over-represented in informal work.

• India has a large share of young people in its workforce and the pandemic has put
them at heightened risk of long-term unemployment. This has negative impacts on
lifelong earnings and employment prospects.

•After the first lockdown in April to June 2020, 20% of those sampled were out of work,
another 9% were employed but had zero hours of work and 81% had no work or pay at
all.

•The recovery after the first wave was too muted to get many young Indian workers
back into employment. For example, rural migrants continued to be reluctant to return
to work in urban areas even before the second wave hit 
 How Has Covid-19 Changed Tourism In India?

• On account of Coronavirus, the Indian tourism and hospitality industry is

expecting a potential job loss of around 38 million.

• Indian Association of Tour Operators (IATO) estimates the hotel, aviation and
travel sector together may suffer a loss of about ₹85 billion keeping in mind the
travel restrictions imposed on foreign tourists.

•Impact of Covid-19 would be felt on both white and blue collar jobs.

•India’s outbound and inbound travel will witness an all time low.

•At least 30 per cent of hotel and hospitality industry revenue could be impacted if
the situation doesn’t improve by the end of June 2020.

•There is a threat of job loss of nearly 15% in the hotel and restaurant industry
once the lockdown is lifted, as they will not see an immediate surge in demand.
• Aviation industry in India could incur losses worth ₹ 27,000 crore  in the first quarter of
2020-21.

• The passenger growth of airlines is likely to fall sharply to a negative 20-25% growth
for the 2020-21.

• The tourism sector was already facing some trouble before the rise of the Covid-19
pandemic due to the impact of the global economic slowdown.

• Economic growth in the world decelerated in 2019-20, resulting in weaker growth in

foreign tourist arrivals and foreign exchange earnings from tourism in India.

•With more than 60% of organized hotels in India shut, recovery should be expected
gradually.
 Why Agriculture Sector Matters?

• The agricultural & allied sector carries immense importance for the Indian economy. It
contributes nearly one-sixth to the Indian national income and provides employment to
nearly 50% of the workforce.

• It is fundamental for ensuring food security of the nation and also influences the growth of
secondary and tertiary sector of the economy through its forward and backward linkages.

• While other sectors are reported to be under significant stress, it is important to analyse
the impact on agricultural and allied sectors which provide likelihood to majority of the
population in India.
 COVID-19: Concerns related to Rural Economy

•The COVID-19 pandemic has occurred at a time when the global and Indian
economic growth was already expected to decelerate. The declining trend may
have become more severe due to COVID-19, as indicated by many factors.

• For instance, recently released estimates by Govt of India indicate that production
in the eight core sectors of our economy contracted for the third month in a row,
with output declining 23.4 per cent in May 2020.

• Overall growth has been adversely affected in most core sectors, apart from
fertilisers.
 Prioritising Agriculture Sector for Economic Recovery

•The economic implications of the novel Coronavirus (COVID-19) pandemic have

brought the agricultural sector into sharp focus and heightened its responsibility to
feed and employ thousands who might have lost livelihoods.

• At this time when most sectors of the economy are reported to be under significant
stress, the agricultural sector continues to be promising and cushioning the
economy.

• The area sown under all major kharif crops is expected to be higher than
corresponding period during the last year.

• Since the agricultural sector continues to be one of the bright spots amidst this
pandemic, there is a need of prioritising agricultural sector during this time to ensure
speedy economic recovery of the country
 KEY AREAS WHERE COVID AFFECTED THE AGRICULTURE SECTOR
•Impacted on Agriculture Production

•Magnitude of Change of Production at the Impact of COVID-19 on farm gate prices:

State level

•Impact of COVID-19 on availability of Agri-inputs

•Impact of COVID-19 on Supply, Demand and Wages of Agri-labour

•Impact on Marketing of Agricultural Produce

•Impact on Banking Activities

•Impact on Microfinance Activities of SHGs/NBFCs

 Recommendations

• A working team consisting of dialysis physicians, nursing staff and technicians should
receive training in updated clinical knowledge of the COVID-19 epidemic, epidemic
prevention tools and guidelines from the government, scientific societies and hospital
authorities.

• Instructions should include how to use the different types of facemasks, how to use
tissues to cover the nose and mouth when coughing or sneezing, how to dispose of tissues
and contaminated items in waste receptacles, and how and when to perform hand hygiene.

• Training can be done peer to peer or online. Latest care recommendations and epidemic
information should be updated and delivered to all medical care personnel as needed.

• Staff members should self-monitor their symptoms (if any) and should inform the team
leader in case they or their family members develop symptom(s) suggestive of COVID-19
infection.

• Sick members of the team should stay at home, and in any case should not be in contact
with patients or other team members.
•Look for opportunities to innovate. In the midst of any crisis is always opportunity. Once the
immediate response to the crisis is secured, organisations should consider opportunities for
short or medium-term innovation.

• The risks of getting COVID-19 are higher in crowded and inadequately ventilated spaces
where infected people spend long periods of time together in close proximity.

• Outbreaks have been reported in places where people have gather, often in crowded indoor
settings and where they talk loudly, shout, breathe heavily or sing such as restaurants, choir
practices, fitness classes, nightclubs, offices and places of worship.

•To make your environment as safe as possible: Avoid the 3Cs:

spaces that are closed, crowded or involve close contact. Meet people outside. Outdoor
gatherings are safer than indoor ones, particularly if indoor spaces are small and without
outdoor air coming in.

If you can’t avoid crowded or indoor settings, take these precautions: Open a window to
increase the amount of natural ventilation when indoors.

Maintain social distancing. Work from home if possible, and avoid crowds and poorly
ventilated indoor spaces Keep at least six feet between yourself and others who don’t live
with you. Avoid social touching, this includes shaking hands, kissing or hugging, instead try a
hand wave or a smile.
 CONCLUSION
• COVID-19, a disease caused by a novel coronavirus, is a major global human
threat that has turned into a pandemic.

• The only study so far reporting an outbreak of COVID-19 in a dialysis centre

indicates that dialysis patients are a highly susceptible population and
haemodialysis centres are a high-risk area in the outbreak of a COVID-19
epidemic.

• The management of patients on dialysis affected by COVID-19 must be carried

out according to strict protocols to minimize the risk for other patients and
personnel taking care of these patients.

• Measures of prevention, protection, screening, isolation and distribution have

been shown to be efficient in similar settings. Prevention plays a key role; the
other measures are essential in the mitigation and containment of the COVID-19
pandemic in haemodialysis centres.