ECONOMIC CHALLENGES DUE TO COVID-19...

We all know that lot of people lost their lives due to covid-19... 

When this kind of pandemics spread around the world, it also affects the economic status of the world.. 

Let's read to know about the economic crisis that our world is facing now.... 

      Economic activity has been curtailed to enforce social distancing — an indispensable bullet in the coronavirus disease (Covid-19) war.

      The World Bank and the International Monetary Fund (IMF) warned that the virus is pushing the world economy into a recession worse than that after the 2008 financial crisis. Moody’s downgraded India’s GDP growth rate forecast for 2020 from 5.5% to 2.5%. A United Nations Conference on Trade and Development (UNCTAD) report titled The Covid-19 Shock to Developing Countries pleaded “governments to do whatever it takes” to stop economic contraction becoming a recession or worse, a prolonged depression, and to protect the poorest.

      United Nations secretary-general Antonio Guterres called for a large-scale, coordinated, comprehensive and multilateral response based on solidarity and shared responsibility. His proposals for a “double-digit-percentage” of global GDP investment, massively increasing resources to developing countries by augmenting IMF capacity including through Special Drawing Rights’ issuance and of MFIs like the World Bank are critical.

      The G20, representing world’s most powerful economies, expressed its resolve to defeat Covid-19, but so far, concerted global action and cooperation, and enhanced liquidity and funding has not materialised. Significant national relief and stimulus packages announced by the United States, Europe, China and India are expected to help staunch the economic haemorrhage and finance the coronavirus war...

     Developing countries, including India, face several economic challenges. These include volatility and precipitous fall in financial markets and commodity prices, and financing gap due to shrinking fiscal revenues and Covid-19 expenditure. Liquidity crunch, disruptions in international trade, and transport, depletion of foreign exchange reserves, devaluation of their currencies, fall in export revenues due to export controls and contraction in global markets and economic engines also causes for concern.

They also face the prospects of a global food, pharmaceuticals and medical supplies crisis as producing countries impose export control and stockpiling. India could face a remittances crisis due to coronavirus-related redundancies in major labour export markets.

The economic impact on India needs to be assessed by what some Harvard economists call the “shape of the shock” and it’s “structural legacy”. These will depend on the nature and extent of the disease burden, resources deployed/diverted for treatment/care/ vaccine, the trajectory of the pandemic, the collateral damage to sectors, state of the pre-crisis economy, policy responses and special measures taken.

Resilience and rebound will depend on the duration of the lockdown, the stage at which the lockdown was imposed— in India’s case it was early enough — and social distancing compliance by citizens. Reducing uncertainties around health security driven economic decision-making will help and slightly longer lockdowns seem better than stop-go options.

India has to ensure that in this interregnum, a banking/credit crisis does not occur, liquidity at household and corporate level is maintained, there is minimal disruption in capital formation and investments. Labour displacement is to be minimised and migrant labour encouraged to stay in place or return after the lockdown including though repurposing for the corona war.

    The lockdown extended for more than a months and it affects the middle class people more and more.... 

    

    Pharmaceuticals, biotech, medical supplies and equipment and related infrastructure for health sector capacity, supply and value chain is a vital multisectoral cluster to create with all stakeholders — private and public. Consumer durables, construction materials, electronics, engineering goods, IT, speciality textiles and garments, AI and robotics are other promising areas...

    All the sectors are facing severe economic problem... Let's see what will happen after this lockdown... However recovering back to the normal situation is still the question mark... And it will surely takes many years to recover...