Covid-19 had not only affected our economy but many people had lost their lives due to this pandemic. During first wave we had seen a strict lockdown all over the country. Educational institutions such as school, colleges, offices and industries were closed. Transport from one state to another were restricted. India’s economy had been hit hard by the pandemic, especially during the second wave. The financial period of 2020/21 probably was the worst year in terms of economic contraction in the country’s history. Many people lost their jobs. India’s unemployment rate in 2020 became 7.1 which indicates that it has performed poorly. Two lockdowns during first and second wave impacted the production of the industries. Many factories and offices were closed and the production of goods and services declined. The Supply chains were also disrupted because inter state transport services were hindered. As different economic units closed down, the common man lost their jobs and wages. As a result, demand of goods also fell.
After the pandemic immerged, Indian economy faced several constrains. India’s growth showed a downward trend. Globally, demand for Indian agricultural products fell because the international trade was ceased. Lockdown started during the harvest of Rabi crops. Farmers expected good return but for the global disruption of supply chain the prices of the crops fall. Restriction on transport of goods made the situation worse. Many people had lost their jobs, for that the actual size of the labour force shrank during the period of March and April 2020. In 2021 the second wave ended with low economic growth, unemployment, inflation and pay cuts.
Economic recovery after second wave
A report in Market Outlook by Kotak Mutual Funds shows that India is improving on various aspects and showing signs of recovery. Among some of the signs, we can see the amount of GST collection. India collected more than Rs 1.3 lakh crore GST in November which is the second highest GST collection in this financial year. On the other hand, India had unemployment rate of 7.4 percent and it is higher in urban areas. Production Linked Insurance will help to create 10 million direct jobs and 34 million in-direct jobs in India. The other sectors which is growing and have potential to provide jobs are food sector, pharmacy and telecom and networking. Production of coal has risen 131 per cent to 114.1 million tonnes in September. Fertilizer sales, power consumption, tractor sales, cement production, port cargo traffic, fuel consumption are showing improvement above pre-Covid levels. We can notice that the economic recovery is faster than the damage created by Covid-19.
Vaccination played a big role in this recovery. We had seen loss of lives in first and second wave but due to India’s vaccination drive the third wave had minimum effect. Country wide Vaccination drive helped to gain hard immunity. The unemployment rate has dropped and the companies are designing massive hiring plans. In third wave government and private sector focused on planning rather than panic. During third wave corporations had reduced employee strength in offices to 20 percent. Headquarters of Tata Group the Bombay house, closed its offices and advised its employees to work from home. The third wave had minimum effect on economy and on people’s lives. From all these signs we can easily predict that India’s economy will continue to grow in post covid world order.
