The Nationwide lockdown due to the Coronavirus pandemic has affected the economy badly. With no businesses running in the country the economy size has shrunk. The rising cases of Coronavirus have forced the government to extend the lockdown many times. It started with the Janta Curfew on March 22, 2020, announced by Prime Minister Modi which he remarked as a “ beginning of a long battle against Covid-19 in India.” This was followed by a nationwide lockdown on March 24, 2020. Since then, It has undergone many phases -
Lockdown 1.0 (March 25 - April 14)
Lockdown 2.0 (April 15 - May 3)
Lockdown 3.0 (May 04 - May 17)
Lockdown 4.0 (May 18 - May 31)
Lockdown 5.0 (June 01- June 30)
In its early phases, all businesses and factories suspended except the necessary facilities. But, observing its impact on the economy relaxations were provided in the later phases to some extent. But the GDP growth of India declined due to little business activities for months.
In a report by a foreign brokerage, it is estimated that there will be a 2% downfall in the Indian economy. The report is based on the assumption that lockdown extends till mid of July.
With Unlock 1.0 some of the businesses are now back in work mode in certain areas. But the most contaminated area like Delhi, NCR, Mumbai, Bengaluru, Chennai have not been opened till now. These metropolitan cities contribute to 60% of GDP in India. So, the economy is still under regression.
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There are estimations that if these semi lockdowns remain in place for a long time the economy will contract to 5% only. Many big businessmen and Industrialists are considering this as a threat.
Recently, Mr. Rajiv Bajaj, Head of Bajaj Auto, commented,
“Lockdown has flattened the wrong curve in India. It was placed to flatten the COVID curve but it ended up flattening the GDP curve.”
“India’s GDP has hit an 11-year depression in Quarter 4 after a full week of lockdown. The economy was already in decline mode and the lockdown made the matters even worse”, he added.
Industrialists are of the view that though restrictions have been eased in certain areas but it will not help much. Most of the manufacturing units are in Red Zones and without them, businesses will not run for long.
The economic devastation is forcing the government to unlock and provide ease of doing business. As most of the industries, MSME (Medium and Small Scale Enterprises) have suffered major losses they are in need of support. The government has announced a 20 Lakh Crore COVID relief package. It is roughly 10% of the GDP which makes it among the world’s most significant ones. However, will it really be useful for revitalizing the curbing economy or not - It is a question that still remains unanswered.
With no vaccine invented for the coronavirus infection until now, it is going to remain a threat for a while. But with proper preventive measures and effective economic strategies we can come out stronger and better.