India’s Growth Recovery set back due to Covid-19
Up till now the growth rate of the Indian economy was increasing and blossoming when suddenly the rate chain broke down because of the outrage of the pandemic in the country. The final year analysis of 2021, states that the economic rate can still be hit by half of the percentage whereas independent economists only predict one percent of the deeper cut.
4-4.5% is the approximated growth of the economy in the first two quarters of the fiscal year. That means the increase in growth rate will only be rounded to 5% which is the slowest rate in the next 11 years to come. The credit entirely goes to the pandemic for dragging the growth rate to its lowest point where there was a forecast of 6-6.5% of the growth rate of the Indian economy.
Many financial planners and architects like NITI Aayog, the Economic Advisory council and finance ministry of the PM have been ordered to present the assessment of the impact of the epidemic on the economy of the country.
According to the RBI, the country is safeguarded from almost every global value chain and so it is very much out of the danger zone. But as it has its involvement in various global activities so the economy will face ruptures and destructions. The most severe pain and injury will be felt by sectors like aviation, tourism, trade and hospitality along with other sectors that will deteriorate the economic activity.
The growth rate of the economy on the given calculation can only be a bit possible depending on the way it is able to survive and come out of it successfully. According to a statement by economist industries like Real Estate, manufacturing, agriculture and pharmaceuticals will go through “the supply side contagion effect”. The supply brunt will be borne by durables, pharmaceuticals and automobiles industries.
This will lead to a slower process of not just consumption but for production too. If there is an extended continuation in malls and travelling being shut down for a longer period of time it will have a deep impact on the service of loans.
The epicentre of the virus from where it started and ended up being a global pandemic is likely to experience a good percentage of growth in its economy during the first quarter of 2020. The worst affected countries will be drained badly into recession in the month of July in this year which will lead to even slower economic growth.
But India being farther away from the danger zone will be less affected because it has a smaller exposure to the global economy. The biggest cushion of the Indian economy is its lower oil prices that can support the government in revenue-boosting and create a household budget room for it.
The intensity can be minimized but that does not mean that the slowdown can be arrested by monetary and fiscal policy. The current state of India is bad but not worst as is estimated and highlighted by the growth rate and percentage given by financial policies and economists. Even with a slower growth rate, it can still recover quite a lot from whatever it has lost. The recovery is not impossible but it’s just slowed down and will take time to come on wheels to move forward. The economy has witnessed a very big loss but it is not so deep that it cannot be regained or revived.
On the contrary, the Indian economy is still doing well in development as compared to other countries. At least there are some resources that can support the government in sketching out a financial plan and have a strong budgeting system that can save the economy from even nearing the danger zone mark. The economy is trying to make it active and working out in those parameters that will result in profits.
In the end, we all have to survive and fight with this. As it is recently been stated recovery is the new normal so it can all be recovered and normal. Things have only slowed down but not stopped activities and work. The momentum has to be matched with to recover the economy once again.
The economy is facing a crisis but it is at a point from where it can bounce back as well. The first step to be taken is to help in regrowth of the industries on whose shoulders the Indian economy is more dependent for its increased economic growth over the years.
Revolutionization of the economy will take its own time and pace but once the action is taken and the process gets started even if not immediately the growth rate will definitely be started showing great results and a better picture of the country.