Covid19 and its unprecedented effects on Indian Economy

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Covid19 and its unprecedented effects on Indian
Economy Overview Corona Virus is a respiratory
disease which is technically called SARS Virus
and the disease it causing is called Covid19. It
has come as a ghost to haunt 2020. We do accept
it has a health scare, But we cannot deny the
financial impacts of Covid19 on Indian
economy. In 2020, each and every country is
dependent on each other for certain things. That
is the main reason each and every country will
be impacted by this disease. In this Blog will
shall specifically discuss on the impacts of
Covid19 on Indian Economy. Ratings of India 21
days lockdown is definitely going to impact
Indias financial year 2021, which will begin on
April 1. On 26th of March, finance Ministry
announced Rs.1.7 lakh crore relief package.
Moreover, RBI joined the bandwagon by announcing
a sharp rate cut in Repo Rates. This was to make
the credit available at very affordable rates
for the Failing businesses and boost India GDP
growth rate. GDP of India was already in ICU with
a lackluster performance in last 40 years and it
will bring more pain to the daily wage earners
of the country.
Below is the forecast of different agencies for
Indian GDP growth Moodys On March 27, Moodys
slashed Indias GDP growth from 5.3 to 2.5.
This announcement came out after Prime
Ministers announcement of 21 days lockdown.
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CRISIL CRISIL is an Indian Rating Agency and it
slashed the GDP growth rate of India for
financial year 2021 from 5.7 to 5.2 on March
26, 2020. CRISIL has further warned regarding the
negative impacts if the pandemic is not
contained by June 2020.
Standard Poors Earlier SP had estimated 6.5
for India, but recently it reduced it to 5.2.
Even for 2022 SP reduced the GDP growth rate
from 7 to 6.9.On the top of that it has said
Asia-Pacific is guaranteed on the verge of a
recession due to disruptions in
China. Fitch Earlier this year Fitch estimated
5.6 the GDP growth, but it has now reduced it to
5.1.
CARE Ratings CARE, a Mumbai based rating agency,
estimated that in January-March quarter growth
rate is going to be 2.5. It earlier forecasted
a 4.7 growth rate for India before the 21 days
lockdown. Real impact of this shutdown will be
seen in the first quarter of 2021. This can
potentially lead to a de- growth in GDP. If
lockdown ends exactly on 14th April, 2020 then
the GDP is estimated to grow at 3.
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• What India can do from here to boost GDP of
  India?
• There are certain definite steps that Indian
  Government can take to neutralize the current
  situation. Along with working on the war level
  against Covid19, India has to heed upon its
  financial situations as well.
• As India GDP Growth was already in its worst
  shape ever, a downturn can feed itself from there
  on. More layoffs will happen, demand will be
  lower which will lead more companies to shut down
  their businesses. Ultimately it will hamper the
  India GDP growth rate.
• Here the Government of India has to intervene and
  help the current GDP of India to grow. Certainly
  government has taken certain steps in that
  direction. Government has taken the following
  steps
• Government has moved the deadline for Tax
  filling.
• Insolvency proceedings are now starting from 1
  cr.
• Bank charges has been removed from online
  transactions.
• Relief package of 1.7 lakh crore has been
  declared for COVID19 emergency.
• What more Indian government can do to help Indian
  Economy?
• There are certain other steps that Indian
  Government can do, which are as follows
• More Tax breaks and softer loan terms for SMEs.
• Easy line of credit must be provided for MSMEs to
  increase the employment rate and thereby
  increasing the India per capita income. This will
  surely help GDP of India.
• Indian Government should work on controlling the
  inflation and increasing the demand.
• Conclusion
• We do believe that Indian economy is going
  through a gloomy phase, but we are pretty much
  sure as well that under the guidance of our
  Prime Minister we will be able to jump back to
  where we were before. Loans will be cheaper and
  that will be a golden opportunity for new
  investors to jump in. That will be a golden
  opportunity for Women entrepreneurs to capitalize
  on Why a women entrepreneurs should start a
  business is already been mentioned in our last
  article. Thus, all the entrepreneurs, who have a
  dream of starting something of their own, should
  start once this urgency is over.