The rapid outbreak of coronavirus in the country has not only impacted human lives but also the economy in general. The economic impact of covid 19 pandemic in india has been largely disruptive. According to the Ministry of Statistics, India’s growth in the fourth quarter of the fiscal year 2020 went down to 3.1%. CRISIL even announced that it would be India’s worst recession since Independence.
A lot of businesses have been impacted due this pandemic making it difficult for them to survive in the highly competitive market. Major companies like Larsen & Turbo, Ultra Tech Cement, tata motors temporarily suspended or reduced their operations. Employees started working from home . Startups were affected as the funding fell. FMCG companies reduced their operations significantly and focused mainly on producing essential goods. Stock markets were at their worst losses since businesses were falling.
A lot of businesses were shut down because of Covid. Many people lost their jobs. Various businesses such as hotels and airlines cut salaries and laid off employees . Revenue of transport companies such as Ola went down nearly 95% and tourism industry in the country was at a loss of nearly Rs.15000 crore. Unemployment became a big issue for the country. A number of young startups fell because of no or less funding. Venture capital in Indian startups had fallen over 50% in Q1, 2020 from Q4, 2019, according to a report by KPMG.
A survey by Dun and Bradstreet stated that over 82% of small businesses have experienced negative impact of Covid-19 and many would take atleast a year to recover. The pandemic has sped up the pace of digitization across sectors and businesses have reaped advantages like cost reduction and increased productivity. Globally, digital adoption has accelerated by 7 years due to the covid-19 crisis,” said Avinash Gupta, Managing Director, Dun & Bradstreet India. Even small businesses have shifted to digitalization and people now are becoming more comfortable with it.
There has been a sharp fall in the aviation industry as well. Nearly 600 international flights to and from India were cancelled for varying periods. Around 90 domestic flights were cancelled. Also, a major part of the population did not want to travel during the pandemic making it difficult for the company to gain profits.
Micro, small and medium enterprises (MSME) exporters have been impacted more by the lockdown on account of Covid-19 pandemic as the sector accounts for over 45 per cent in the country’s total outbound shipments. They faced a lot of issues since the workers migrated to their villages as they had no work in the cities. Other seasonal businesses like people selling crackers during Diwali faced a lot of losses as the government banned bursting crackers during Covid in several parts of the country.
Covid 19 has not only impacted businesses in India but also globally. It will take some time to recover but we will fight back. All we need is global coordination and cooperation with measures to slow down the spread of the virus and of economic actions needed to alleviate the economic damage.