2. Overview
• The economic effect of COVID-19 in India have widely
been disruptive, it has impacted almost every sector of
the economy.
• India hit COVID-19 first time in the Fourth Quarter of
2020.
• “India's growth in the fourth quarter of the fiscal
year2020 went down to 3.1% according to the Ministry
of Statistics.”
• According to the World Bank, the current pandemic
has "magnified pre-existing risks to India's economic
outlook"
• In India, the life versus livelihood debate also played
out, with the government first announcing that life
would be prioritized over livelihood, which later
3. Some
Facts
• “GDP figures for Q1 (April to June) FY21, which
showed a contraction of 24% as compared to
the same period the year before.”
• “Unemployment rose from 6.7% on 15 March to
26% on 19 April and then back down to pre-
lockdown levels by mid-June.”
• “More than 45% of households across the
nation have reported an income drop as
compared to the previous year.”
• “tock markets in India posted their worst loses
in history on 23 March 2020”
• “Around 140,000,000 (14 crores) Indians lost
employment during the lockdown”
• “The Indian economy was expected to lose
over ₹32,000 crore (US$4.5 billion) every day
during the first 21 days of the lockdown,
according to Acuité Ratings.”
4. Analysing Impact on
Indian Economy
1. EffectonPrimarySector
a) Agriculture
2. EffectonSecondarySector
a) Manufacturing
3. EffectonTertiarySector
a. Tourism
b. E-commerce
c. Logistics
d. Services
e. ExportandImport
5.
6. What Primary Sector is?
• The primary sector includes all those activities
the end purpose of which consists in exploiting
natural resources: agriculture, fishing, forestry,
mining, deposits.
• The primary sector tends to make up a larger
portion of the economy in developing
countries than it does in developed countries.
• In India, it includes the sectors such as
agriculture, fishing, mining, and other
resources extraction jobs.
7. COVID-19 Impacts
On Primary Sector
1. Since agriculture is the backbone of the country and a part of the government
announced essential category, the impact is likely to be low on both primary
agricultural production and usage of agro-inputs
2. This sector provides employment to about 43.21% of the population in India
and contributes about 16.1% of the Indian GDP.
3. In agricultural sector, due to travel restrictions for lockdown, there has been a
dearth of agricultural workers which has resulted in drop in production.
4. Also, the pandemic lockdown period coincides with the harvesting season of
‘Rabi’ crop but owing to paucity of laborer the crops unabatedly stays in the
field. As the operations of the businesses like hotels, restaurants, sweet
shops and tea shops are suspended, the market of raw materials which are
used for these purpose has gone down leading to grievances of farmers.
5. The pandemic has curtailed the overall demand for metals and minerals
which has trimmed down their prices.
6. Significant fall in global oil prices due to the contraction of demand.
10. What Secondary
Sector is?
• This sector involves the manufacturing of the finished or
the semi- finished goods which are either further
processed or used by the final consumers.
• The industries in the secondary sector adds value to the
supply chain process by processing the raw material and
converting them into some useful form.
• This sector generally takes the output of the primary
sector (i.e., raw materials) and creates finished
goods suitable for use by other businesses, for export, or
for sale to domestic consumers.
• The secondary sector depends on the primary sector for
the raw materials necessary for production.
11. COVID-19
Impacts On
Secondary Sector
1. The federation of Indian Chamber of
Commerce and Industry (FICCI) in march
2020, reported that about 55% of the
business had responded impact to be “Very
high” to “High”. 73% reported reduction in
the orders, 35% reported rise in inventory ,
and 81% reported significant impact on cash
flow.
2. Total loss to the MMSE Sector was
estimated about US$ 10,667 million to US$
16,000 million in profits.
3. The economic shutdown led to the biggest
drop in the unemployment from 6% from the
beigging of the quarter to 26% in the end of
the quarter.
4. A sharp decline in the value of export was
witnessed, that was 48% due to the break in
the supply chain because various lockdown
measures.
14. What Tertiary
Sector is?
1. The tertiary sector covers a wide range of activities from
commerce to administration, transport, financial and real
estate activities, business and personal services,
education, health and social work.
I. It is made of:
II. the market services sector (trade, transports,
financial operations, business services, personal
services, accommodation and food service
activities, real estate, information-communication);
2. the non-market sector (public administration, education,
human health, social work activities).
3. The perimeter of the tertiary sector is therefore defined
by complementarity with agricultural and industrial
activities.
15. COVID-19 Impacts On Tertiary Sector
• IT is also having a share of impact as top Software Companies like Tata Consultancy
Services, Infosys and HCL impacted as technological spending reduced from US and
Europe amid lockdowns across the globe.
• HDFC Securities expect around 2-7% of reduction in IT revenue because of slow
decision making over the next 6 months as businesses will be evaluating the loss of
global economy due to COVID-19 pandemic
• There will be pricing pressure and reduced revenue, client bankruptcies due to lower
spending in the market as per ICICI Direct
• Over 1.5 million schools across India closed down due to the pandemic A switch to
large-scale digital education is not possible now.
•
Only 24 per cent house-holds have access to the internet, according to a 2019
government survey.
• IT Services will be hit hardest during COVID-19, and they listed all the 17 tech, media
and telecom related sectors to have a negative impact during COVID-19.
18. Impact On Various Social Groups
Low
Income
Middle
Income
High
Income
19. Impact On Low Income Families
• India witnessed one of the sharpest drops in
GDP (gross domestic product) growth rate
among emerging economies due to the
pandemic.
• The poor bore the brunt of the economic
contraction that India saw last year.
• It estimated that the number of poor people —
with income less than $2 (Rs 150) or less in a
day — in the country increased from 6 crores
to 13.4 crores. Therefore, the number of poor
people increased in India by almost 7.5 crores
last year
20. Impact On Low- And High-Income Families
• As the economy plunged into a recession in 2020, India’s vast
middle-class also shrank by 3.2 crores in numbers — to 6.6
crores from the pre-pandemic level of 9.9 crores.
• Prior to the pandemic, it was anticipated that 99 million
people in India would belong in the global middle class in
2020. A year into the pandemic, this number is estimated to
be have been 66 million, cut by a third.
• Meanwhile, the number of poor in India is projected to have
reached 134 million, more than double the 59 million
expected prior to the recession. The poverty rate in India
likely rose to 9.7% in 2020.
• Meanwhile, the upper-middle income population had nearly
quadrupled, from 60 million to 234 million.
21. COVID-19 And Healthcare Sector
• Healthcare sector has been at the center of the COVID-19 crisis. On one hand it has had
the responsibility of treating COVID-19 patients, while on the other, it has also faced
several challenges much like other sectors.
• During it all, the sector has had to continuously innovate and come out with new ways of
taking care of patients. Significant changes in consumer preferences and behavior
towards seeking healthcare services are being observed.
• It has now become clear that the COVID 19 pandemic is going to put significant stress on
our already limited healthcare resource. An initial study concerning the infectivity of
coronavirus has reported that an infected patient will infect the other two-person during
the early phase of the epidemic.
• Another important consideration will be developing infrastructure for reducing the burden
on already strained healthcare facilities due to asymptomatic or mildly cases that will be
nearly 80% of infected cases.
24. COVID-19 And Education Sector
• Around 32 crore learners stopped to move schools/colleges, all
educational activities halted in India. The outbreak of COVID-19 has
advised us that change is inevitable.
• Over 1.5 million schools across India closed down due to the
pandemic A switch to large-scale digital education is not possible now.
• Only 24 per cent house-holds have access to the internet, according
to a 2019 government survey.
• In rural India, the numbers are far lower, with only 4 per cent
households having access The education ministry’s budget for digital
e-learning was slashed to Rs 469 crore in 2020-21—the year Covid
struck—from Rs 604 crore the previous year.
• Even in the national capital, when government schools started online
classes during the lockdown, the attendance hovered between "25
and 30 per cent".
• A World Bank report, 'Beaten or Broken: Informality and Covid-19 in
South Asia', has quantified the impact of school closures in monetary
terms-India is estimated to lose $440 billion (Rs 32.3 lakh crore) in
possible future earnings.
