The wrath of COVID-19 continues. It has not only impacted the health but also the financial situation of the country. Unlike several other nations, India prioritized human life over the economy and declared the lockdown. While the nationwide lockdown until May 3, 2020, was a timely move by Modi ji to flatten the curve and ensure that citizens maintain social distancing, one cannot overlook the deep impact on the economy as a whole.  In this blog, I will touch upon the various aspects of the Indian economy that have been affected by the pandemic and the plan that Modi ji has set rolling to counteract the effects.

What’s going on with the Indian economy at present?

A survey by FICCI revealed that we are experiencing an unprecedented collapse in the economy. It is extremely unfortunate to note that while the Indian economy had started on the path of recovery in the latter half of 2019, the pandemic has completely pushed us in a different direction. The supply chain has been badly affected and there is a reduced profitability experienced by several firms. The global oil prices have also taken a massive hit from USD 28 in March to going in negative in April. The Indian stock market has also borne the brunt of the pandemic with a fall of more than 30%. Over 70 per cent of the firms surveyed by FICCI are expecting a sluggish sale in the fiscal year 2020-21. Several key sectors such as MSME, hospitality, aviation, agriculture, and banking have suffered due to the pandemic. But it is not just India – the global economy too has not been spared. As a result, the International Monetary Fund has projected that the GDP of India will be at 1.9% on account of the shocks from the recession in the global economy. 

Here some of the other sectors that have been affected due to the crisis:

Pharmaceuticals industry: While India is a leading exporter of drugs in the world, it is also dependent on a significant amount of important. The outbreak has affected the import of the bulk drugs. 

Automobile industry: Due to the sudden slump in demands, the auto industry has also experienced sluggishness. Given the outstanding inventory for most manufacturers, it is expected that manufacturing will take a hit in 2020.

Shipping industry: Cargo movement has been hugely impacted due to the lockdown of the international borders. As a result, the demand for vessels has also declined significantly. 

How Modi government is handling the situation

Even if the scenario looks bleak, I am still hopeful that we will be able to overcome it because Modi ji has a vision for us.

 On April 24, 2020, Modi ji chaired a meeting to review the impact of COVID-19 on the economy to formulate the reliefs for those sectors that have been hit hard. Finance Minister Nirmala Sitharaman  ji also attended the meeting. Modi ji discussed the present state of economy in details and also took various suggestions on board for resource mobilization.  It is expected that the government will announce a package to specifically target the needs of the urban and rural poor, and provide relief to the migrant workers. I am hopeful that the government will boost more money to the credit guarantee fund trust in order to support the small and medium industries. 

The government has also constituted an empowered group which will be headed by Atanu Chakraborty, Economic Affairs Secretary, to suggest various measures that can provide an instant boost to the Indian economy as soon as the lockdown comes to an end. The committee will also focus on the various relief and welfare measures that can be implemented for various sectors of the economy. 

Modi ji’s vision also takes into account the daily wage labourers and other poor sections of the society. Their needs have been taken care of through the Pradhan Mantri Gareeb Kalyan Yojana, as announced by Modi ji during his address to the nation. 

Prior to this, Nirmala ji had also announced a package of INR 1.7 lakh crore that covered free foodgrains and cooking gas to poor for three months, and cash payments to women and poor senior citizens. Further, the government has already put curb on the expenditure from the exchequer and the funds are being diverted towards fighting the pandemic on war footing. All these steps have been taken by Modi ji to ease the adverse effect on the economy and it makes me very confident that we will be able to land on our feet very soon.

Here are some of my suggestions that can help to revive the Indian economy from the slump:

• I feel the contribution by the employer under Employee Provident Fund should be widened. It may be extended to all companies under a group that has a turnover of INR 100 crore. 
• The coverage of MNREGA should be widened. There should be a pay security plan for the workers who are in the informal sector. These steps along with a successful implementation of Direct Cash Transfer will help.
• There should be a Credit Enchancement scheme for the MSME sector, similar to Pradhan Mantri Awas Yojna, so that the companies can receive a interest subsidy. However, this will only apply for employers who have the same work force as of January 2020.  
• India should be developed as the ‘Health Capital of the World’ instead of just a ‘Medical Tourism Centre’. This will be extremely beneficial as India is gearing up to strengthen its healthcare infrastructure.

I sincerely hope that better days are in store for us and a cure for the virus is found soon. The necessary measures to mitigate the adverse effects have already been taken and we shall be able to overcome this crisis under Modi ji’s leadership.