ISSN 2348-1218 (print) International Journal of Interdisciplinary Research and Innovations ISSN 2348-1226 (online) Vol. 8, Issue 2, pp: (81-83), Month: April - June 2020, Available at: www.researchpublish.com
CHALLENGES OF COVID-19 FOR INDIAN ECONOMY Prof. B. B. Mansuri Department of Commerce, Women’s College, Aligarh Muslim University, Aligarh (India)
Abstract: The Indian Government made timely efforts to mitigate the economic risks of Covid-19 with necessary financial and policy measures .The three major contributors to GDP namely private consumption, investment, and external trade have been affected due to lockdown. Keywords: Challenges, COVID-19, Indian Economy.
1. INTRODUCTION India, the world's fifth-largest economy will have to face many challenges of Coronavirus (COVID-19) outbreak which originated in Wuhan (China) in December 2019. The impact of the COVID-19 pandemic in India has been largely disruptive. The World Bank and other rating agencies has initially downgraded India's growth for the fiscal year 2021 with the lowest figures since economic liberalization. Government Initiatives Indian Government has so far outlined Rs 1.7 trillion($22.5 billion) as stimulus plan providing direct cash transfer and food security measures to give relief to millions of poor and second package of Rs. 20 lakh crores to Micro, Small and Medium enterprises for Atamanirbhar Bharat (a Self- Reliance India) Abhiyan. In the month mid-May 2020, the Prime Minister, in his address to the nation, said that the coronavirus crisis should be seen as an opportunity, emphasizing on domestic products and "economic self-reliance". Challenges Before Indian Economy The Covid-19 spread in the country has significantly reduced the prospects of a durable fiscal consolidation. The impact of the Covid-19 outbreak will exacerbate the material slowdown in India's economic growth which is expected to 1.5 percent expansion in the current fiscal year. Prolonged financial stress among rural households, weak job creation, a credit crunch among the non-banking financial institutions have further increased the probability of a more entrenched weakening. FICCI and Dhruva (a tax consultancy) conducted an Industry survey and took responses from about 380 companies across the sectors. It is said that businesses are grappling with "tremendous uncertainty" about their future. According to the survey, COVID-19 is having a 'deep impact' on Indian businesses, over the coming month's jobs are at high risk because firms are looking for some reduction in manpower. Further, it is added that already COVID-19 crisis has caused an unprecedented collapse in economic activities. There are three major channels of Indian businesses namely linkages, supply chain, and macroeconomic factors which are badly affected. The business activities in the foreign markets are slow which implies a negative impact on the Indian companies. According to the World Bank's assessment, India is expected to grow 1.5 percent to 2.8 percent. IMF projected a GDP growth of 1.9 percent for India in 2020 because the global economy is affected by the COVID pandemic, the worst recession since the Great Depression in the 1930. It should also not be ignored that the lockdown and pandemic hit several sectors including MSME, hospitality, civil aviation, agriculture, and allied sector.
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