india

Post-COVID Indian Economy

Modi

As we all know because of this Chinese Virus, The world economy is in a critical situation. And if we talk about unemployment then India’s unemployment rate had reached 23.5% in the month of May and the biggest reason for this was Lockdown because of Chinese virus spread. Which locked all the Businesses in India and even daily workers are now jobless.

corona
Unlock 2.0

But now the Indian government is gradually opening the lockdown, The Unemployment rate eases to 11% in June from 23.5% in May. But still, the Revival of the economy will take time.

Now let’s talk about the situation of the Indian economy. Maybe the Indian Economy contracted earlier but after the opening of the lockdown, the economy is on its revival stage and still, Companies are operating at their 70 % capacity. That means everything is still not working in their full capacity. The Lockdown which happened in India was longer than expected and still, the coronavirus cases are rising.

This means it is very difficult for the government to make India a fully functional economy until this pandemic ends. And if you think why the government is opening lockdown while coronavirus cases are rising, Then my answer is that India is a developing economy, and feeding 1.3 Billion people is not a child’s play, Government have to do development works, Have to give salaries to the government employees and Government could not function fully on the tax collected from alcoholics.

Lockdown
Line infront of wine shops

India is a densely populated country that means the virus can spread easily and we all know our health infrastructure is not that strong to manage millions of people. That’s why the government needs to take precautions and necessary measures to tackle this situation. Until ChineseVirus ends, the economic future of India is uncertain.

Also, we can’t criticize the government for health infrastructure because providing ventilators to 1.3 Billion people is kind of an impossible task and not even practically possible. No one ever thought that the world will face any medical emergency on this scale. Even America, Britain, Germany like developed nations are not ready for such pandemic.

Heaalth workers

In India, this pandemic situation is uncertain that’s why IMF cuts India’s FY20 growth forecast to 4.8%. Indian economy needs the whole of 2020 just to recover the losses caused by this pandemic. We should also consider the fact that India Is a service-based economy, Whose maximum revenue comes from this sector, and in this whole pandemic situation service sector is the worst-hit sector in India.

But there is also a twist, This crisis is different from every crisis that happened before, If the virus spreads the factories will be stopped, offices will be closed but it has very minimal effect on the agriculture sector. But our financial sector which was already in so many problems before pandemic will face many more difficulties ahead. There are very many chances that the reserve bank will pump more liquidity in the Indian economy.

PM Narendra Modi

To fight with the Post COVID situation the Indian Government had adopted a different approach, No one knows how long this crisis will last and still, there is a possibility that there will be a second wave of coronavirus, and if the Government pump all of his money now then there nothing will be left for the second wave of the virus. So the decision to analyze and pump the money according to situations is the best decision of the current government in my views. If we look towards the western countries they pumped all their money into the economy in the hope to create demand, But instead of creating demand people started to save money because of the ongoing crisis.

So, folks, this is the current situation of the Indian economy. I hope everything will get better soon.

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