IMPACT OF COVID-19
PANDEMIC ON THE INDIAN
ECONOMY
SUBMITTED BY:
• Keshav Raj Tripathi (0212300223552)
• Yash Thakur (0212300227183)
• Shubhi Verma (0212300221234)
• Adarsh Paul (0212300225795)
• Khushi Mehta (0212300225796)
• Bernice Ann Philip (021230022998)
• Satyam Swagat Mishra (021230022283)
SECTOR-WISE IMPACT
• Covid 19 pandemic had negatively impacted private sectors in the Indian economy.
• Covid 19 pandemic had negatively impacted India with a second highest population in the world of
1.4 billion people which is equivalent to 130 Crores.
• There were many negative effects of covid 19 pandemic on people such as-
• Layoffs
• Lockdown
• Health
Negatively Impacted Sectors
1. Aviation and Tourism Industry
• The contribution of the Aviation Sector and Tourism to our GDP stands at about
2.4% and 9.2% respectively.
• The Tourism sector served approximately 43 million people in FY 18-19.
• Aviation and Tourism were the first industries that were hit significantly by the
pandemic. The common consensus seems to be that COVID will hit these industries
harder than 9/11 and the Financial Crisis of 2008.
• These two industries have been dealing with severe cash flow issues since the start
of the pandemic and are staring at a potential 38 million lay-offs, which translates to
70 per cent of the total workforce. The impact is going to fall on both, White and
Blue collarjobs.
• According to IATO estimates, these industries may incur losses of about 85 billion
Rupees due to travel restrictions. The Pandemic has also brought about a wave of
innovation in the fields of contactless boarding and travel technologies.
The revenue of Indian carriers declined by 86 percent, airport operators witnessed an 84 percent drop, and Air
India reported a 78 percent fall in revenue during April-June 2020, over April-June 2019. The Airports Authority
of India (AAI) — responsible for managing and maintaining civil aviation infrastructure across the country —
reported a 92 percent fall in its revenue from Rs 2,973 crore during April-June 2019 to Rs 239 crore during the
corresponding period in 2020, a government reply to the Lok sabha on September 22,2020 said.
2. Automobile Industry
• Passenger vehicle sales in India
declined by 51 per cent in March, hit
by the 21-day nationwide lockdown
due to the coronavirus pandemic.
• As per the data released by Society of
Indian Automobile Manufacturers
(SIAM), passenger vehicle sales last
month dropped to 143,014 units as
compared with 291,861 units in
March 2019, a decline of 51 per cent.
• Two-wheeler sales saw a decline of 39.83 per cent at 866,849 units in March compared to
14,40,593 units in March 2019.
• Total sales across categories declined by 44.95 per cent last month to 1,050,367 units as
against 19,08,097 units in March 2019.
• The month of March 2020 was one of the most challenging months for the auto sector as the
21-day lockdown resulted in bringing the production and sales of vehicles to a standstill in
the last week.
• As the revenues took severe hit, the OEMs struggled on meeting fixed cost and working
capital requirements "As per our estimates at SIAM, the auto industry is losing Rs 2,300
crore in production turnover for every day of closure.
3. Real Estate
• The coronavirus pandemic has badly hit the Indian housing
market. Fault lines are widening as nearly 2.1 crore salaried
employees lost their jobs in the last five months (April-
August: CMIE data) and home sales have dropped to 52
per cent in the first half of 2020, which may further go
down.
• The residential real estate demand is expected to plunge
50-70% y-o-y in the current fiscal year, with the Covid-19
pandemic crushing economic activity and with it, big-ticket
spending,”
• Real estate market was feeling the heat of slowdown much
before the pandemic hit. Quarterly data shows a gradual
decrease in sales from October 2018 (Q3) and it plunged
into negative in Q3 of 2019. However, the downtrend in
new launches is also shown from April 2019. But pandemic
has worsened the sales and new launches.
Positively Impacted Sectors
• 1. Pharmaceuticals
• 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.
• There has been a recent rise in the prices of raw materials imported from China due
to the pandemic.
• Generic drugs are the most impacted due to heavy reliance on imports, disrupted
supply-chain, and labor unavailability in the industry, caused by social distancing.
• Simultaneously, the pharmaceutical industry is struggling because of the
government-imposed bans on the export of critical drugs, equipment, and PPE kits to
ensure sufficient quantities for the country.
• The increasing demand for these drugs, coupled with hindered accessibility is
making things harder.
• Easing the financial stress on the pharmaceutical companies, tax-relaxations, and
addressing the labor force shortage could be the differentiating factors in such a
desperate time.
• 2. Electronics and Telecommunications
• There has been a significant number of changes in the telecom sector of India even before the Covid-19 due
to brief price wars between the service providers.
• Most essential services and sectors have continued to run during the pandemic thanks to the implementation
of the ‘work from home’ due to restrictions.
• With over 1 billion connections as of 2019, the telecom sector contributes about 6.5 per cent of GDP and
employs almost 4 million people.
• Increased broadband usage had a direct impact and resulted in pressure on the network.
• Demand has been increased by about 10%. However, the Telco’s are bracing for a sharp drop in adding new
subscribers.
• As a policy recommendation, the government can aid the sector by relaxing the regulatory compliances and
provide moratorium for spectrum dues, which can be used for network expansions by the companies.
IMPACT ON
EMPLOYMENT
• Unemployment was a dreadful aftermath of Covid-19 pandemic.
• Supply chain and logistics got affected due to the over night lockdown.
• Business sectors couldn’t get the required raw materials to produce output.
• To get an ease from the losses, organizations went for downsizing.
THE EFFECT:
UNEMPLOYMENT RATE
GDP(Gross Domestic Product)
• India faced a huge loss of -23.9% in the covid 19 pandemic.
• The gross domestic product (GDP) of India, which is among the countries with the longest school
closures during the COVID-19 pandemic.
• India has notable enrolment in secondary education and among students in rural areas. Pandemic-
induced school closures have also been more extensive there.
• Economies with a significant population of schoolchildren and college-going youth in rural areas
and in the poorest and second wealth quintile — have been worst-hit as they lack access to stable
Internet connection needed to study online.
• Learning and earning losses are significant because a notable portion of the impacted population
will migrate to the unskilled labor force.
IMPORT AND EXPORT
IMPACT ON INFLATION
ANY QUESTIONS ?
THANK YOU
