Pandemic | India | Economy | 25th October 2021 | Virtual Wire
Picture -Business Standard
Coronavirus was first identified in Wuhan, China. The first case of coronavirus in India was identified on 30th January 2020. Since then, it has spread to 160 countries and WHO has declared it as a pandemic.
Covid has largely affected the world’s economy, it is responsible for the slump in GDP worldwide. Indian economy took a huge hit in 2020-21 due to the pandemic the Gross domestic product (GDP) contracted by 7.3% this is the worst decline ever observed since independence. This was mainly due to the countrywide lockdown, major companies like BHEL, Castrol and Maruti Suzuki also announced a temporary shutdown. Along with that the state’s worst affected like Delhi, Maharashtra are responsible for almost 21% of the GDP itself. Almost 10 million migrant workers returned to their hometowns.
The informal sector of the economy has been the worst hit. The panic and uncertainty caused by the pandemic have resulted in Sensex crashing at a yearly low, further causing the market investments to decline and Investor’s confidence has taken a hit. Few industries have benefitted in this situation like healthcare, pharmaceutical and fast-moving consumer goods (FMCG). Due to the pandemic, almost 80% of the major Indian companies have faced cash flow difficulties. There has been mismatched demand and supply which caused the supply chain to break and result in shortage as well as inflation. The cash crunch has also caused a lot of small businessmen to run out of business. From growing only 4% in 2019-20 to contracting by 7.3% in 2020-21 to staring at another low economic growth recovery, the Indian economy has come to a halt.