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COVID 19 CRISIS IN INDIA: ECONOMIC
IMPACT AND THE RECOVERY
COVID 19 CRISIS IN INDIA: ECONOMIC IMPACT AND THE RECOVERY 2
SYNOPSIS
Introduction & Effect of COVID – 19
The difference between different economic crisis
Impact of Covid -19 on Indian economy
Re-opening of the economy - India
Effectiveness of traditional monetary and fiscal policies
Geopolitical consequences of Covid – 19 in India
Predictions of the Indian economy
Conclusion
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Introduction:
• The COVID 19 pandemic caused mass disruptions in the economy compared to previous crises due to its far - reaching Socio -
Economic impacts
• Even though the COVID 19 pandemic has caused huge setbacks to the Indian economy and while the growth of the economy may
strain relationships with China being its trading neighbour, export opportunities, domestic demand potential, and relevance of India as
an alternative investment market are going to work in favour of India
COVID - 19 Pandemic
In India, the first case was recorded in 2019
march 2020 and unfortunately it got
multiplied infinitely with the big impact in
normal life
Second wave of COVID - 19 Pandemic
2020 We were trying to get back into normal life
but we were house arrested by this
pandemic
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Effects of COVID - 19:
Loss of human lives and
Supply chain
disruption of economic activities
Since it was a spreadable and tangible Disruption in supplies, unemployment and
disease, capable of making a life at risk low consumption demand
Decline in GDP Social problems
During 2020 - 2021, there is a reduction in Uncertainty in economy, job cuts,
world GDP growth rate by 3.3% social isolation etc..
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History of severe
crisis:
• The world has experienced two major economic disruptions since the great depression before COVID - 19.
• AEC - Asian Economical / Financial crisis
• GFC - Global Financial crisis
# Asian financial crisis Global financial crisis COVID - 19
Year 1997 2008 - 2009 2019
Housing sector and share
Problematic area Housing sector related Health related
markets
Increase in FDI flow Grating loans at low
Effect Unemployment
declining interest
Risk Panic at market level Panic at market level Panic on survival
Nature Endogenous Endogenous Exogenous
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Impacts of COVID - 19:
• India is the fifth-largest economy by nominal GDP and the third-largest economy by PPP. The COVID pandemic has brutally affected the Indian
economy.
GDP Growth Micro, Small and Medium enterprises
• FY 2019 - 20, 4% Medium term impact 46% decline in FY 20 which affects the
• FY 2020 - 21, 7.3% (Lower since employment, supply and consumption
independence) demand
Manufacturing and service sectors Unemployment, job and salary cuts
Mass supply challenges and demand in all Increased unemployment rate in FY 21 is
sectors like tourism, hospitality, aviation and real 7.1%
estate etc..
Poverty Revenues
• Per capita consumption fell by 20% Non tax revenues and non debt capital
• Individual income dropped by 40% receipts dropped by 15%
Get back the agreements
Increased inflation
Foreign investors withdrew the significant
amount from Indian market
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Impacts of COVID - 19:
India is the fifth-largest economy by nominal GDP and the third-largest economy by PPP. The COVID pandemic has brutally affected the Indian economy.
Long term
impact
Consumption demand Investment in health care
No of poor increased by 2 times and middle Huge benefit in future
class decreased significantly
Withdraw of FDI Global inequality
This is decreasing over last 30 years which
571 million USD from India might slow down
increases the inequality
the economy growth in long run
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Monetary and fiscal
policies:
• Monetary and fiscal policy are macroeconomic tools used to manage or
stimulate the economy. This policy together has great influence over a nation's
economy, its businesses, and its consumers.
• Medical impact of the Pandemic was handled well in India , But financial cries
are not. Even many fiscal and monitory amendments( Aatma Nirbhar
Bharat Package (ANBP) are made , those are not supported much to
MSME’s (Micro, Small, Medium enterprises ). So along with this
policy some additional improvement required in future if the same crisis arise.
Recovery and control 9
measures:
This is a matter of both life and death and prosperity or poverty. A deep recession is likely to cause widespread hardship, including increased
mortality rates for reasons other than the virus. We must, therefore, find smart strategies for re-opening businesses while minimizing health
risks. • Vaccination by category wise, age wise
• Insisted some protocols to be followed strictly for inter movement of peoples
• Negative test report submission for long and air travel
• Huge people movement work places to be worked with 50% employees
• Strengthening the local health system
• A list of permissible activities for industries
• Oxygen plant operationalization setup across the country
• Reinforcing the principle of locking down only the containment zones, not entire districts
• Digital app facilities for Strengthening coordination and communication at district level
team
• Promote work from culture for software countries
• Planning for contingencies plan like different task forces
• Phased-in Re-opening by Age Group
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Geopolitical consequences of Covid – 19 in India
Need to add
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Predictions:
o i t t e ’s
De l o o k
• With the changing state of the world, it ’s o u t l
I ndi a
o i t t e ’s
may be hard to predict the economy of De l o o k
c ut s ’s o u t l
d b a n k I nd i a
Wor l m i c
India. e c o n o
’s
India f o re c a s t
gro w t h
• Increase in fuel prices will affect the
cost of food and other living expenses
which will bite into the spending habits 7.1 - 7.6% 6.0 - 6.7%
FY 22 - 23 FY 23 - 24
on those in India as there will be an
7.5%
increased cost both from the increased FY 23
cost of oil prices, especially as demand
increases for energy in the
infrastructure and industrial sectors
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Conclusion
The COVID 19 Pandemic was unique in its effects on the global economy through changing of supply chains and
spending habits, it created similar effects in inflation and less consumer confidence in the market. When looking
at the response of India to the pandemic it was found that India had a robust approach to the pandemic through
its usage of monetary policies, and its Make in India Policy. The purchasing manager’s index (PMI) numbers
attained 11 years high in May 2022. There is a significant rise in capital spending by the government. However,
the issues of inflation, income equality, and access to medicine will continue to expand in the country. In
addition, the concern of the push for India to become a manufacturing centre for the world might create
strained relationships with China which will become its direct competitor. Even considering all of this, India is
expected to command as the largest growing economy with 6%-7% GDP growth YOY over the next 5 years