Indian Economic Journey while Mitigating the COVID 19
The recovery process of the Indian Economy will gain momentum after the proper elimination of restrictions imposed.
The COVID 19 is disastrous not just in terms of claiming lives and affecting millions of people it has severe effects on the Economy. Businesses, Sectors, MSMEs are widely affected. The economic effect of the COVID 19 is widely accepted by the research papers of RBI (Reserve Bank of India) and several rating agencies. According to the Premier agencies like RBI & Ministry of Statistics & Programme Implementation (MOSPI) revealed that there will be a contraction in GDP of about 8%.
Analysis of Economic Impacts
First Wave Lockdown resulted in the contraction of GDP(Gross Domestic Product) by 24.4% in the First Quarter. While the Early signs of Improvement started after the First Quarter with V-Shaped Economic recovery. In the Second quarter, GDP is contracted by 7.4% and in the third quarter, it came on 0.5%, 1.6 % in the third quarter. Fall in Household Consumption is the main effect of the COVID pandemic on the Indian Economy by 9.1% in FY21 as compared to the 5.5% in FY20. The government also increased the Public Expenditure in Fiscal Year 2021.
The manufacturing sector is showi8ng signs of recovery from the fourth Quarter of 2020-21 and witnessed an increase of 6.2% in January to March quarter. According to Chief Economic Adviser Krishnamurthy Subramaniam,” Economic Impacts of the Second wave will not be very large”. Despite the Lockdowns & effects, the Indian Stock Market is booming day by day.
Policy Response & Analysis
According to the OXFORD ECONOMICS ”Investment is the major reason behind recovery process & increasing consumption. The First quarter is in the line with expectations and the growth forecast for 2021 will be at 9.1%.GDP(Gross Domestic Product) is likely to be less affected in comparison to the previous year as the Lockdowns were partial in the second wave and there were no complete shutdowns. The recovery process of the Indian Economy will gain momentum after the proper elimination of restrictions imposed.
According to IMF WEO(World Economic Outlook) in 2020 International Economy is contracted by 3.3% due to the deadly COVID wave. IMF(International Monetary Fund) projected the Global Economic Growth will be at 6% in 2021. In 2022 it will be moderate and up to 4.4 %. An increase in Corporate Profits due to the Booming nature of Stock markets is stabilizing India’s Economy and pushing it into a revival mode. According to Various Economists” The situation is not to tell exactly that How the Second COVID wave affected Macro Economic Variables? Impacts are not as severe as last year due to betterment in the health infrastructure and policy response.
India a Developing Economy is leading with Momentum before the COVID pandemic but the coming of this deadly virus in 2020 has disrupted economic activities for few months. It resulted in severe economic damage and major GDP contraction. But after the first Quarter of 2020 Indian economy is on road to recovery and continuously reducing the effects of pandemic but unfortunately, it came again in 2021 and impacted the Economy to some extent. Increasing the speed of Vaccination drives like the concept of Universal Vaccination is stabilizing the Economic variables. Policy measures of Government like Putting Fiscal stimulus in the affected sectors help in the recovering process.
Edited By Team CLIQTAX
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