As the world grapples with the Coronavirus pandemic, of which the first known case emerged in Wuhan, China, and later spread across the world and within few months and has been deemed a pandemic by the WHO. Currently, there are over 7,94,000 cases in India, and more than 12.3 million across the world. Out of the confirmed cases in India, the recovery rate is near to 62% and about 21, 604 has lost their lives. Every country, including India is striving hard to bring a dedicated vaccine to end the outrageous tough times.
According to Moody’s the Indian GDP will shrink to -3.1% as compared to its previous contraction of 0.2% as published in April 2020. Moody also downgraded all the G 20 advanced economies to 6.9% in 2020 and with a bounce-back of 4.8% in 2021. Moody further lowered the investment ranking for India to the lowest investment grade.
With the forecast for all business projections for the next two quarters shrinking, the disposable income of the large consumer base will too dwindle as the organizations look to cutting costs through downsizing. Since the beginning of the lockdown in March, unemployment rose in India, which showed a steep increase in April and consequently slowed down in May and has tapered down as India slowly opened in June says Moksh Popli.
Moreover, India as an economy is closely integrated with the global economy. As global economics struggles with the closing of businesses, especially retail, travel, and tourism. India is also reliant on over restraints for import and export of goods and raw material, with being the 10th moratorium to bear the burnt of the upset Chinese supply chain. The effects can be seen in sectors like textiles, apparel, chemicals, automobile, pharmaceuticals, etc.
The $266 billion relief package that was announced by the Prime Minister and elaborated by Nirmala Sitharaman, the finance minister, has both monetary and fiscal benefits. Some are of the view that the efforts made by the government are insufficient to deal with the ongoing regression and losses that the business will see in the future. But Moksh Popli is convinced with the strategies and the approach of the government.
Meanwhile, the truth prevails this continuing COVID-19 pandemic, the chief contributors to the GDP of India which are investment, consumption, and external trade will see an intense deterioration. Indian production has decreased in the last three months and has seen a drop of 55.5% as exposed to last year. This has resulted in a loss of turnover of Rs. 2254 Crore for the auto industry. The consumption has also seen a downward spiral as data published by RBI has seen the consumer confidence lost as the future expectations index went below 100 which is seen as negative and anything over 100 is deemed as good.
In the end, marking the conclusion Moksh Popli says that as India enters a stage of new normal of masks and sanitation with lockdown measures lifting, it would take substantial steps by the government and businesses to improve the forecasts and provide new salvation and a lifeline to the Indian Economy.