COVID-19 CORONAVIRUS, ECONOMIC IMPACT OF COVID-19 PANDEMIC IN INDIAN, & STEPS THE GOVERNMENT CAN TAKE TO RESTART THE ECONOMY PPTS

1. CREATED BY :
KANIKA CHAWLA

2. “The COVID-19 pandemic in India is part of
the worldwide pandemic of corona virus 2019(COVID-
19) caused by severe acute respiratory syndrome corona
virus 2 (SARS-CoV-2)”

3. The first case of COVID-19 in India, which originated from china, was reported
on 30 January 2020. As of 26 June 2020, the Ministry of Health and Family
Welfare (MoHFW) has confirmed a total of 490,401 cases, 285,636 recoveries
(including 1 migration) and 15,301 deaths in the country.
India currently has the largest number of confirmed cases in Asia, and has the
fourth highest number of confirmed cases in the world with the number of total
confirmed cases breaching the 100,000 mark on 19 May and 200,000 on 3 June.
 India's case fatality rate is relatively lower at 2.80%, against the global 6.13%,
as of 3 June. Six cities account for around half of all reported cases in the country
– Mumbai, Delhi, Ahmedabad, Chennai, Pune and Kolkata.
As of 24 May 2020, Lakshadweep is the only region which has not reported a
case. On 10 June, India's recoveries exceeded active cases for the first time
reducing 49% of total infections.

4. Economic impact of the COVID-19
pandemic in India
During the lockdown,
An estimated 14 crore
(140 million) people lost
employment while salaries
were cut for many others.
The Indian economy was
expected to lose
over ₹32,000 crore(US$4.5 billio
n) every day during the first 21-
days of complete lockdown,
which was declared following
the coronavirus outbreak.

5. The World Bank and rating agencies had initially revised India's
growth for FY2021 with the lowest figures India has seen in three
decades since India's economic liberalization in the 1990s.
On 26 May, CRISIL announced that this will perhaps be India's
worst recession since independence.
State Bank of India research estimates a contraction of over 40% in
the GDP in Q1 FY21. The contraction will not be uniform, rather it
will differ according to various parameters such as state and sector.
Unemployment rose from 6.7% on 15 March to 26% on 19 April
and then back down to pre-lockdown levels by mid-June.
Under complete lockdown, less than a quarter of India's $2.8 trillion
economic movement was functional.

6. . . .
Steps the government can take
to restart the economy:
1) Wherever feasible, offices/industry should be asked to work beyond
standard office hours with staggered timings.
2) Make a compulsory pay cut of 25 per cent for a quarter in the formal sector
so as to ensure that there is no laying off of jobs.
3) Increase the working hours of banks, particularly for the cash transaction
operations so that DBT customers are not affected. While doctors and health
workers are fighting the war at the frontline, bank staff are the foot soldiers.
4) Together they will eventually win the war against the Covid-19 outbreak.

7. 5) Postpone the academic calendar of all schools/colleges/universities at least
by a quarter. The outbreak has happened during the summer break – so
some delay in academics can be adjusted. In the meantime, online classes,
however sub-optimal, can continue.
6) All the restaurants should be allowed to open, but services should be
restricted for home delivery or take-away only.
7) Run more public transport, including bus and local trains, with 1/3rd-2/3rd
rule in place.
8) Ask every establishment/supermarket to take the responsibility of
implementing social distancing rules.
9) Keep the rural economy fully functional to the extent possible so that basic
agricultural and other economic activities are not interrupted. Restrictions
must be imposed against gatherings in rural haats, tea shops and market
places. Local administration including panchayats to play a significant
role here.

8. 10) Oil prices are at an all-time low. With subdued demand, inflation is
expected to be subdued. However, acute supply constraints against
dwindling inventory may put pressure on prices, particularly for urban
consumers. Government must ensure such price escalations do not take
place.
11) With low crude prices, the running and variable cost of domestic airlines is
expected to be low. So opening domestic flights keeping the middle seat
empty is a viable option. This will make social distancing possible for
flights as well. Passengers may be asked to report three hours prior so that
necessary checks can be done before flying.
12) Finally, liquidity provision and timely reach to the end consumers is vital.
With limited fiscal space, RBI must come up with better alternatives for
adequate liquidity provisions. Extraordinary times demand extraordinary
measures. If provisions through banks are not working out for whatever
reasons, options of liquidity provision to other non-bank financial entities
may be explored. This is particularly important for the MSME sector.