COVID-19 (Corona Virus):
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| COVID-19 (Corona virus) and its impact on Indian economy |
Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered Coronavirus. Coronavirus outbreak
was first reported in Wuhan, China on 31 December,
2019. Coronavirus (CoV) is a large family of viruses
that causes illness. The novel coronavirus is a new
strain of virus that has not been identified in human
so far. The virus has spread widely and the number of cases is rising
daily as governments work to slow its spread. W.H.O is
working closely with global experts, governments, and other health
organizations to provide advice to the countries about precautionary and
preventive measures.
Along with an unprecedented human toll, COVID-19 has
triggered a deep economic crisis. It does not require an economist to tell
that a complete social and economic lockdown of India for months would severely
impact the supply side of the economy, that is, production and
distribution of goods and services, except for the essential items that are
exempt.
Sector wise impact of COVID-19 in India:
The
impact of COVID-19 on the economy is no doubt
devastating. No sector has escaped from its impact. The economic impact
of COVID-19 in India is vary by sector. Areas most
affected are mentioned below -
- Aggriculture:- The nation-wide lockdown has left farmers across the country bereft of agricultural labor just before the crucial harvesting season. Moreover many agricultural markets are still closed, despite orders from the home ministry to exempt all farming activities from the lockdown. So farmers also worry about selling their crops in the markets. Unless the government acts soon, farmers in India will face a miserable future leading to bankruptcies and farmer suicides.
- Textile industry:- Production halts in China and lockdown in India have had an economic impact. It is known that India imports US$ 460 million worth of synthetic yarn and US$ 360 million worth of synthetic fabric from China annually. It also imports over US$ 140 million worth of accessories like buttons, zippers, hangers and needles. Now, India does not have the domestic supply base to cater to such a huge demand of these raw materials that in turn affecting the textile sector of India. Moreover, On an average, India exports 20-25 million kg of cotton yarn a month to China. Cotton yarn prices have fallen by 3-4% in domestic market as traders anticipate a curtailed demand from China due to the prevailing situation there. Further, prolonging of the Coronavirus will result in a decline in China’s imports of cotton yarn and hence, impact the cotton yarn export business of India. This will divert India’s surplus cotton yarn to the domestic market, further reducing the price of cotton yarn.
- Automobile Sector:- It was already witnessing a sluggish demand for the last one year. The present situation has further aggravated the problem and compounded the situation with an acute liquidity crunch. A huge chunk of Indian imports is dependent on China. China accounts for 27 per cent of India's automotive part imports and major global auto part makers such as Robert Bosch GmbH, Valeo AS and ZF Friedrichshafen AG have factories located in the Hubei province. The deadly outbreak has rendered the Chinese factories ineffectual, which in turn has brought the Indian automotive industry to a halt.
- Entertainment and sports:- Covid-19 credits a negative impact for Indian entertainment and sports sector. Due to nation-wide lockdown in India, places of gathering like cinema halls and malls have been closed. Promotional and sport events are also being called off. Indian Premier League (IPL) has been deferred for the time being. Hence these are accounting for a heavy loss for the country.
- E-Commerce:- Covid-19 (Coronavirus) and nation-wide lockdown has made an affect on e-commerce sector also. Several e-commerce players are unable to service existing orders and are not accepting new orders, even when there is a surge in demand for home delivery. However, companies are trying to service essential items on priority basis.
- Tourism and aviation:- India is big on cultural and historical tourism, attracting domestic and foreign nationals throughout the year. It does not come as a surprise that a large number of confirmed COVID-19 cases in India include foreign tourists. But with visas being suspended and tourist attractions being shut indefinitely, the whole tourism value chain, which includes hotels, restaurants, attractions, agents, and operators, is expected to face losses worth thousands of crores. Experts believe the tourism industry is likely to take a massive hit and it could end up crippling the industry for the foreseeable future.
- Pharmaceuticals:- The toll on the pharmaceutical industry is of significant concern for India, mainly as 70% of active pharmaceutical ingredients (API) are imported from China. These active pharmaceutical ingredients are essential to a large number of pharmaceutical manufacturing companies in the country. But, outbreak of Corona virus and nationwide lockdown is making a massive hit to this Pharmaceutical sector.
Thus, outbreak of Covid-19 (Corona virus) is playing a very negative role worldwide. It is affecting almost all the sectors in the economy. It mainly affects the economy of the world. Due to the corona virus the whole world is facing a lot of problems. This type of emergency has never been imposed in the history of India as yet. No vaccines of Covid-19 have been discovered yet. Now, there is only one option left which is pray for the God to put an end to this pandemic from the globe.
