The Covid-19 pandemic has impacted economies around the world like no other event that experts can recollect since the Great Depression. The ramifications have been to a great extent. Some of the strongest economies around the globe are struggling to cope with the situation in the wake of an unprecedented demand shock and a shutdown of all key economic activities that drive growth. India, too, has been hit hard. Global rating agency today slashed India’s GDP projection for FY21 to 0.8 per cent. The Covid-19 pandemic has been a huge blow to India, especially since many sectors were already facing a crisis when the virus storm hit. The virus not only accelerated the crisis but also ended the good run that some sectors were enjoying. Adding to the worries ,in a steep demand shock that experts say classified as a long-term worry, citing uncertainty in the post-pandemic landscape. Unemployment rose from 6.7% on 15 March to 26% on 19 April and then back down to pre-lockdown levels by mid-June. During the lockdown, an estimated 14 crore (140 million) people lost employment while salaries were cut for many others. More than 45% of households across the nation reported an income drop as compared to the previous year. Up to 53% of businesses in the country were projected to be significantly affected. Supply chains have been put under stress with the lockdown restrictions in place; initially, there was a lack of clarity in streamlining what an "essential" is and what is not. Those in the informal sectors and daily wage groups have been at the most risk. A large number of farmers around the country who grow perishables also faced uncertainty. Major companies in India such as Larsen & Toubro, Bharat Forge, UltraTech Cement, Grasim Industries, Aditya Birla Group, BHEL and Tata Motors have temporarily suspended or significantly reduced operations. Young startups have been impacted as funding has fallen. Fast-moving consumer goods companies in the country have significantly reduced operations and are focusing on essentials. Stock markets in India posted their worst loses in history ever. MSME Sector The Micro, Small and Medium Enterprises (MSMEs) are literally the backbone of all Indian sectors and often engaged in manufacturing and export activities — two key drivers of the Indian economy. Today, almost all MSMEs are out of action due to the lockdown, chocking all production activities at major firms across sectors. There are several reports that indicate how MSMEs are reeling under crisis and have no money to pay their employees. From leaders to experts and industry bodies, everyone has appealed the government to increase its relief package for the MSME sector, which contributes to over 30 per cent of India’s GDP. It is worth mentioning that a majority of the small units may have to shut shop if they do not get a relief package soon. The government is planning to release Rs 20,000 crore relief package, divided into two funds, for helping MSMEs. Although the present scenario though not favourable towards growth, certainly does indicate many chances of recovery with IMF predicting an impressive 8.8% growth rate in 2021 if propers reforms are put to action by the capital. Only with time as the expert's say the economy will go back to its robust form ,as a pandemic of this scale will take its own time to subside. Till then stay home, stay safe!
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