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| The Economic Fallout of The Lockdown | | |
O.N Koul
In a society all things are interrelated and connected and thus they affect each other and so is the case with the deadly virus which is today threatening the whole world. In India the ill effects of the corona virus and the consequent lock downs have badly affected the economy of the country and it has retarded our economic growth and thus it hampers our march as the economic power in the near future. But then there is no option than to impose total lockdown in the society to break the chain of the Covid-19 and also to retard the community transmission of the virus. So the government is forced to resort to the lockdowns in the interest of the health and security of its citizens who are the real masters in a democracy. Though the citizens embrace the social distancing and the lock downs but there are many ill effects of these lockdowns which will be hardly made good in near future. The lock down affects the organised and the un-organised sector of the economy with the organised labour bearing the brunt of the lockdown as they work and earn for the day to day basis and they hardly have the bank balances or have anything for the rainy day and thus they are the worst suffers in these lockdowns and economically they are crippled and it badly affects the economy. To be more specific the economic fallout of the lockdown can be delineated as under. In fact the corona virus and consequent lockdown has affected all the sectors of the economy. The lockdown is set to cost the Indian economy up to Rs. 17-78 lakh crore and mount the woes of the such as travel and tourism, manufacturing, auto even as partial opening of the sectors outside the corona virus hotspots from April 20 has kindled hope. The economic fallout can be given as under. Travel and tourism:- with all modes of transport being suspended, the nationwide lockdown has deeply impacted travel and tourism sector. According to the travel experts the economic loss to travel and tourism sector in the lockdown period remains the biggest concern, but even the bigger worry for the sector is how long it would take to recover once the lockdown is lifted. Agriculture:-Agriculture is the backbone of the economy with two-third of the population depending on it directly and indirectly and the lockdown affects this sector very much. Lockdown would mean lower yield which means lower income for the farmers and hence poor demand for consumption. Manufacturing Sector:- with the lockdown the manufacturing activity is disrupted as the labour force both skilled as well as the un-skilled is not attending factories and as a result the production activity has come to a grinding halt and it has thus affected the production and as such the economy. It also leaves the employees cashless as they are not being paid their wages for the period and hence affects consumption and the demand. All this loss the productivity has the negative effect upon the various sectors of the economy.
E-commerce:- Industries have also suffered huge losses and setbacks such as Amazon, Walmart and Flipkart. Stock market:-The stock market in India posted their losses in history on march25, one day after a complete 21 days lockdown was announced. The stock market’s crushed and affected the economy. The sudden fall of the stocks and shares has a negative effect on the state of the economy. It negatively affected the investment activity and hence the production. Besides the above the lockdown also badly impacted the services sector and the allied activities of agriculture like dairy farming, poultry farming and other activities and thus affected the economy. From the economy’s point of view, the lockdown undoubtedly looks costly right now, but compared to the lives of Indian citizens it is nothing. According to RBI Chief Raghuram Rajan the corona virus pandemic in India may be just the greatest emergency since independence. Usually lower agriculture prices, slowdown in construction sector and below average performance of the flagship MGNAREGA Programme has contributed to lower farm incomes, deceleration in rural wages and loss of the employment opportunities in the rural sector. A large number of farmers around the country who grow perishables are also facing uncertainty. Unfortunately various businesses such as hotels and airlines are cutting salaries and even firing the employees in spite of the appeals of the prime minister of not firing employees. Major companies in India such as Larsen and Turbo, Bharat Forge, Ultra Tech Cement, Grasim industries, Aditya Birla group; Tata Motors and Thermax have temporary suspended operations. In brief the economic fallout of the lockdown is huge and the economy is bearing it at present but the million dollar question is how long will the economy sustain in such an environment. The only hope is a new set of the guidelines for the calibrated opening of the economy and relaxations of the lockdown were also set in place and it is a great hope for all. |
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