The impact of coronavirus is having a tremendous effect on the global economy and on India’s economy and is affecting major businesses around the world. The outbreak of this virus can be effectively controlled with proper policies. As China was the origin of this virus, it has experienced that right policies can help fight against this disease while some of the policies come with difficult economic tradeoffs.
Tough Decisions To Control The Spread
As it is observed that the pandemic has spread to major parts of the world, it is very important to take some hard decisions for protecting people. Controlling the virus will come at the price of slowing economic activity. Governments have imposed curfew to avoid social gatherings and to reduce mobility. As the virus can survive for about 72 hours on an average, it is necessary to break the cycle for containing the virus spread. Government of India has taken major steps to break the coronavirus cycle. Honourable Prime Minister Narendra Modi has requested all indians to take proper precautions and to maintain discipline.
Indian economists said that there will be a hit of 0.3 - 0.4% on the GDP in the next fiscalyear and growth rate for the next two years will be slow. Moreover, Reserve bank of India’s governor Shaktikanta Das said “India is relatively insulated from the global value chain and to that extent impact on India will be less but India is integrated into the global economy, so there will be some impact.” Sectors like tourism, aviation, hospitality and trade will be majorly impacted by the COVID-19. DK Srivastava, chief policy adviser at EY, said that the impact would be limited to a 0.5 percentage point downward revision in the current and next quarter if the situation was contained within a month. However, if it dragged on till May, then GDP growth in FY21 could dip to 4%. This will also affect manufacturing, agriculture and the pharmaceutical industry. Sectors like consumer durables, automobiles and pharmaceuticals will feel the brunt of supply constraints.