EFFECTS OF CORONA ON ECONOMY

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The outbreak of COVID-19 has impacted all the nations of the world  in an enormous way, especially the nationwide lockdown which has brought social and economic life to a standstill. A world which was buzzing with activities has fallen silent and all the resources have been diverted to meet the never-experienced-before crisis. In another report entitled "COVID-19 and the world of work: Impact and policy responses" by the  International Labour Organization, it was explained that the crisis has already been transformed into an economic and labour market shock, impacting not only in the supply (production of goods and services) but also in the demand (consumption and investment). International Monetary Fund’s (IMF) chief said that, ‘World is faced with extraordinary uncertainty about the depth and duration of this crisis, and it was the worst economic fallout since the Great Depression’. 

Agriculture 

Since agriculture is the backbone of the country and a part of the government announced it as the essential category, the impact is likely to be low on both primary agricultural production and usage of agro-inputs. 

Aviation and Tourism 

Aviation and Tourism were the first industries that were hit significantly by the pandemic. The common consensus seems to be that COVID will hit these industries harder than 9/11 and the Financial Crisis of 2008. These two industries have been dealing with the severe cash flow issues since the beginning of the pandemic and are staring at a potential 38 million lay-offs, which translates to 70 per cent of the total workforce. 

Pharma 

The pharmaceutical industry has been on the rise since the start of the Covid-19 pandemic, especially in India, which is the largest producer of generic drugs globally. It had a market size of $55 billion during the beginning of 2020. Simultaneously, the pharmaceutical industry is struggling because of the government-imposed bans on the export of critical drugs, equipment, and PPE kits to ensure sufficient quantities for the country. 

Oil and gases 

The Indian Oil & Gas industry is quite significant in the global context – it is the third-largest energy consumer and is only behind USA and China and contributes to 5.2% of the global oil demand. The complete lockdown across the country slowed down the demand of transport fuels. 

Conclusion 

In view of the scale of disruption caused by the pandemic, it is evident that the current downturn is fundamentally different from the recessions. The sudden shrinkage in demand & increased unemployment is going to alter the business landscape. Adopting new principles like ‘the shift towards localization, cash conservation, supply chain resilience and innovation’ will help businesses treading itself into a new path in this uncertain environment.


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