The COVID – 19, pandemic has been the worst scenario faced by mankind, with 12.9 million cases worldwide and 5.8 lakh deaths, every nation is feeling its impact. The International Monetary Fund ( IMF) clearly stated in its report that the world’s GDP will contract to 3 percent, but each nation will experience it differently as the effect of coronavirus depends on three factors – the pre-pandemic economic situation, the current impact, and the response.
In a country like India which has been a victim of decades-long corruption, sluggish GDP, a weak economy, unemployment. It’s no surprise the pandemic just adds to the problems and makes them worse. But the thing that concerns us is how the government and other leaders use that as an excuse for our country’s weak governance and conditions.
The Indian economy was already in the process of slumping, well before coronavirus arrived. It’s not like we entered an economical BOOM. Growth in GDP has already fallen to 4.7 percent, the lowest in 11 years. From January to March, GDP had only risen by 3.5% compared to last year, where growth was 5.7%.COVID – 19 disrupted economic activity that resulted in losses for more than 2 months with shops and businesses shut down throughout the country. The nation feels the impact of this pandemic, but the underlying problem here is that – Is COVID – 19 the only reason for the current economic situation.
For the last three years, there has been a slow momentum in our GDP, India has already faced a problem of falling investments and savings. Each nation is experiencing the same storm but not everyone is in the same boat.
Our boat has wider holes, so we can sink rapidly. And who should be blamed for this? Last November, Parle Products, the famous maker of Parle-G biscuits, says Parle-G is the worst affected after being put under the high GST Slab of 18%. The country ‘s favorite biscuit has de-grown and if it continues, the business would have to lay as many as 10,000 employees in its various factories. Parle had to raise prices by around 5%, which resulted in a major decrease in revenue. There has been a marked decline in consumption across both food and non-food categories, with categories such as salty snacks, sweets, spices, soaps, and packaged tea contributing to a slower consumption.
Similarly, Maruti Suzuki’s senior official had also said the automotive industry is going through the worst slowdown it’s seen over the last 50 years. Our finance minister- Nirmala Sitharaman had tried to explain this by saying that, many factors like BS6 emission standards, registration-related issues, and a change of mindset are responsible for people who now prefer Ola or Uber rather than sticking to the monthly installments of their vehicle. Before making such statements, we need to reconsider and evaluate. Ola and Uber came into being over the last 6-7 years. The automotive industry has also seen some of its best times in this era. So, what happened just in the last few months that the downturn got so severe. Are these factors even strong enough to contribute to the slowdown?
India’s unemployment rate dropped to 11 percent in June 2020 from a record high of 23.5 percent in the previous two months, as many companies resumed operations after weeks of coronavirus pandemic closures, but even in March 2020, it hit a peak of 8.7 percent in the last two years. With lakhs of young people joining the job hunt each year, India needs to create many more jobs. Else, the so-called demographic dividend threatens to become a demographic burden.
Recently, the minister of union law, Ravi Shankar Prasad, tried to defend the slowdown in the economy by mentioning the huge business made by the entertainment industry, particularly films that make it 100 crore clubs, if we had to take the film business into account to measure GDP then what is the function of textiles, FMCG, IT, etc. that have been major contributors to GDP for decades.
There have been many policies and changes implemented recently, but how many have affected or improved our economic condition. Demonetization was brought in to curb the black money and corruption problem, but all it did was to abolish falsified currency and long queues at ATMs. The issue persists at low levels. Many employment programs and even ‘MAKE IN INDIA’ have been introduced to increase the internal production of jobs, but the output is not measurable. Almost 1/3 of our graduates are still unemployed every year.
The real problem is that a country like India needs some educated leaders to think rationally instead of making false claims.
But all of this was before COVID – 19, the real question is what is the current situation. Questions were also raised regarding the poor strategy of containing coronavirus spread. India ‘s policy of lockdown has been called a BIG FAIL. It’s a well-known truth that our prime minister doesn’t believe in advice and consultations. At this time it is important to allow the decisions by mutual consent of all the responsible bureaucrats and even opposition, But we do know that welcoming opposition in our country is a big deal. We had not followed the models of other countries to impose lockdowns. Each country expected to see a decrease in the fresh number of cases with the unlock but in our country the number of fresh cases is hitting a new high each week.
Government critics claim the shutdown was poorly organized, and the authorities are now struggling to contain its fallout rather than concentrating on the coronavirus.
Prime Minister -Narendra Modi, who came to power in 2014 promising to pull India ‘s poorest people out of poverty, the lockout backlash is bringing big political threats with it. he won an even greater second-term majority based on the efficient social programs aimed directly at the poor, such as gas supply, power, and affordable housing provided by his administration. The magnitude and severity of this renewed economic distress would only raise the pressure on his government to get back on track with the country’s economy.
2020 will also be an extraordinarily tough year not just for states and businesses, but for those on the poverty line as well. Citizens at the border will have to find jobs to earn money to stay alive. Fiscal, monetary, and regulatory systems do need to be organized in such a way that those on the edge have a safety net. Bringing people out of poverty must become the nation’s highest priority. Yet it won’t be easy.
“It’s time to take responsibility and introspect because the virus is inhuman, it can’t differentiate between poor and wealthy, however, WE can do it.”