The lockdowns, restrictions, and curfews are imposed all over India due to the unfurling of the COVID-19 pandemic. This has made it difficult for the economy to grow further.
As the people are locked in their homes in fear of catching the deadly virus, the economic activities are halted until the situation improves any further. If the virus is not contained anytime soon by imposing strict measures for everyone, not simply out of religious preferences, then we can expect growth of GDP in FY23. The virus proved out to be a boon or bane to every individual firm, depending on their public use during the COVID-19 pandemic.
For instance, the pharma companies like Sun Pharma, Cipla witnessed a surge in their market production and demand. But in contrast, companies involved in travel and tourism, and aviation had no negative impact on the market. According to the Nomura India, Business Resumption Index economic activity declined from 82.9 on March 22 to 44.7 on April 26. By 13 September 2020 economic activity had almost returned to its previous closure. Unemployment rose from 6.7% on 15 March to 26% on 19 April and returned to pre-closure levels in mid-June.
At the time of the closure, an estimated 14 crore (140 million) people had lost their jobs while many more were cut off. More than 45% of households across the country reported declining incomes compared to last year.
India’s GDP cut down by 10% by Barclay’s, local lockdowns would cost $38 billion till June 2021.
The ongoing COVID-19 situation in India is not very much encouraging. The vaccination drive is running slow, and not even 3% of the population has been fully vaccinated yet. Nevertheless, the vaccine shortage in the country has caused merely 6 states in India that are currently providing vaccines to 18+ people. The uncertainty in the number of deaths caused by COVID-19 is another reason to worry about as it will also show its impact on the economy.
Barclay’s a global brokerage firm has cut India’s GDP growth from 11 percent to 10 percent observing the current COVID-19 wave in India. The local restrictions and ongoing lockdowns will contribute to USD 38.4 billion loss in FY22, they suggested. India’s economy will be down by another 7.6 percent in FY21 as the minor restrictions being imposed to curb the COVID-19 virus have been imposed in various states. Several people lost their jobs, which has resulted in unemployment at huge rates. The companies are on the verge of shutting down, hence several business connections have also been affected.
“As India’s second wave of COVID-19 continues, there is growing uncertainty about the number of cases and deaths. Reducing vaccines also undermine India’s recovery prospects. It lowers our forecast for GY GDP growth by 121 percent 10.0 to indicate this uncertainty, “wrote Barclays’s analysts. India is “in an unlikely state” of being a global epidemic now, with diseases rising to more than 4 lakh a day, indicating that the area of infection areas is raising expectations of waiting in many provinces.
Similarly, the slowed rate of vaccination has affected the logistic supply and huge surge in demands by several states. Liberalized vaccination will have a minor effect in the short term, they suggested.