The arrival of Covid-19 marked the beginning of the lockdown phases in India and around the world. When the pandemic started initially there was chaos all over the country and thus our honorable PM Mr. Narendra Modi declared a day of lockdown on 16th March, 2020 and requested everyone to stay at home. When the situation was out of control with the increase of cases every single day, the lockdown was extended from 24th March to 14th April at an initial stage. Many people keep a count on the number of cases but are unaware of the economic recession that happened during the lockdown.
The prime minister acknowledged the huge economic cost and suffering to people due to the lockdown but reminded all that it was still the right path if the country hoped to avoid the horror seen unfolding in many countries. Due to complete lockdown at the starting of the pandemic, people started avoiding going to shops to buy things and thus started the era of economic recession. India, in the past few years, has not faced such a situation in terms of economy. India’s economy lies in the informal sector which does not come under tax payment. Shopkeepers, vendors, labourers and mostly farmers are the ones who come under the informal economy. Many small businesses are partially tax-paying and partially regulated. All this makes collection of data and therefore the estimation of economic growth very difficult. Since lockdown, they are not capable of producing enough for the country’s economy. India’s GDP, or the total value of goods and services produced by our country, is derived primarily from formal sector data. This data is used and it is assumed they have a relationship with the informal sector and thus a national figure is estimated.
When we talk about the formal sector, companies like Hyundai, Maruti and Bajaj seem to be in loss since the lockdown started. On May 1, Maruti said for the first time in its history it achieved zero sales in April due to the lockdown, and probably something close to zero in production as well. RBI Governor Shaktikanta Das said the global economy is heading into recession. “Domestic economic activity has been impacted severely by the two-month lockdown,” Das said in a televised address. It is clear that the economic damage of the COVID-19 pandemic has so far been deep and far-reaching in India, but the hope is that the economy has endured the worst and things will begin to improve as lockdown measures are gradually lifted.
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Tags: Economic Recession lockdown Recession
