Coronavirus adds to Indiaâ€™s slowdown, but is there light at the end of the tunnel?
The coronavirus crisis is expected to pull the world into a recession. No country is insulated from its horrors. But, Is there any different Scenario for Indian businesses and consumers as they go through an extended lockdown?
The coronavirus pandemic occurred at a time when the world was already going through trouble – rising crude prices, slowing economies, depreciating currencies, increasing trade tensions, loss of employment, work visas, and so on
The pandemic has led to massive supply chain inefficiencies, dipped consumer demand, crashed global stock markets, paused economic and industrial activity, and brought about drastic changes in lifestyles and social behaviour.
On the other side in short period of time due to drastic reduction in fuel due to lockdown , crude reduced to negative prices due to challenges of excess supply. Farmers are also in loss as due to lockdown perishable goods like vegetables, fruit and flowers are wasted due to break in logistic and closure or limited operations of the markets.
India, which was already going through its longest fall of GDP decline in almost three decades. The nationwide lockdown is estimated to have wiped off Rs 7-8 lakh crore from the Indian economy, according to Centrum Research. If lockdown even partially extended further , economic crises will only multiply.
The World Bank estimates that India's GDP growth rate will fall to 1.5 percent to 2.8 percent in the current fiscal (FY21). That would lead to the slowest GDP growth rate since economic liberalisation in 1991.
The 3 major contributors to India’s GDP — domestic consumption, investment, and external trade — have all been severely impacted by COVID-2019. Analysts believe that a “severe demand shock” is under way, particularly across discretionary/luxary spending.
By now, it is fairly evident that the present crisis is fundamentally different from past recessions
Arun M Kumar, Chairman and CEO, KPMG India elaborates, “Among the most striking consequences of this pandemic have been the game-changing impact on our social behaviour, as well as on legacy networks and patterns of economic activity. Speed, agility, and innovation are required from governments, businesses, and society in crafting responses to cope with this evolving new normal.”
Contribution from- Mrs Darshana Thakkar