Professor and Head of the Department PGDM (IB)
Prof Navneet Gera discussed about an interesting topic with PGDM students of JIMS, KALKAJI in class. COVID-19 has been affecting almost all the sectors of Indian Economy such as education, businesses, services etc. Dr. Navneet Gera here discussed various challenges experienced by Indian Economy during COVID-19 and action taken by Government to combat its effects. World is beholding different stages of Corona virus and India is not an exception. Countries have adopted a variety of approaches to combat the deadly corona virus. In last two years, the world has changed tremendously. In an era of global peace, this epidemic has resulted in inconceivable losses in human lives and the global economy. Not only are the figures alarming, but the pace at which the challenges have arisen is also disconcerting. Governments and health professionals are continually calibrating their response to the pandemic, and strategic decisions are being made on a regular basis. Economists and policymakers have acknowledged that the economic damage caused by the Covid-19 pandemic will be substantially bigger than that caused by the global financial crisis of 2008, both globally and in India. Although the duration and extent of the crisis remain uncertain, one thing is becoming increasingly evident that coping with the consequences of Covid-19 will be a significant economic challenge. On a global and national basis, however, every effort has been made to investigate breakthrough medical treatments. Furthermore, the doctors and scientists are working on an accelerated mission mode.
Action taken by Government of India for Unprecedented losses
Let’s start with an overview of the novel coronavirus’s economic impact. The Asian Development Bank estimates that the virus will cost the world economy between $2 and $4 trillion. As estimated by some legal firms, the total losses might be as high as $6.5 trillion. The economy in India is also suffering. Only around a fourth of India’s $2.8 trillion GDP was operational during complete lockdown. During the lockdown, we expected to lose about Rs 33,000 crore ($4.5 billion) per day. The Indian government was active in addressing and resolving challenges on a variety of fronts, as seen by the efforts taken by various authorities to protect the business community.
Corrective steps have been taken by Ministry of Commerce and the Ministry of External Affairs to protect the business community. We’ve seen how the authorities has been proactive in addressing income tax and GST concerns by extending the deadlines for filing various taxes online. The Reserve Bank of India has addressed a lot of issues in order to re-energize the economy and re-orient it strategically. As a result, the CRR, Repo rate, and Reverse Repo Rate have all been reduced.
An attempt has been made to investigate the response of policies to reduce the effect of COVID-19 on Indian Economy, a developing economy. Data is gathered from reports released by the World Trade Organization (WTO), Ministry of Statistics and Programme Implementation (MOSPI), Reserve Bank of India (RBI), newspaper articles, and interviews with major economists. The Reserve Bank of India (RBI) has designed a stimulus package to mitigate the negative consequences of nationwide lockdown in country. One key point that came up was that in order to understand financial instability, monetary policy should be used as a crisis-prevention tool. Monetary policy, according to economists, is characterized as changes in interest rates and the money supply that are crucial in combating economic stagnation.
The government tried everything, including fiscal measures, to achieve its goals. Even in the most optimistic scenario, where the government incurs no additional costs as a result of Covid-19, the deficit was expected to be higher than the estimated figures according to 2020-21 budget. Almost all economic activity had been halted for the 40 days of lockdown, and the majority of them were unlikely to resume anytime soon. We were unsure whether the efforts made by various authorities to combat the national interest in COVID-19 are sufficient, or whether this will be a long-term response to the economy, necessitating the implementation of a few additional stimulus packages to resuscitate the economy.
Decisions to permit exports of hydroxychloroquine were taken, Govt had also taken decision on restriction of exports for ventilators and sanitizers which was mentioned on the website of www.dgft.gov.in. ECGC also provided full support to exporters that are encountering trade challenges, notably with payments, and published information about COVID-19 on their website. Big question is that -are these efforts sufficient or a lot has to be done to recover the economy from ongoing pandemic.
Professor and Head of the Department PGDM (IB)
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