The next big thing in GDP of India after Lockdown

                          Image from financialexpress.com

Corona virus became a topic of awe and discussion around the world since December last and beginning of this year. The number of people coming in this virus is much more and is increasing continuously.

Corona virus outbreak is now seen all over the world. There are cases of rapid spread of this virus, which is increasing concern among the doctors. New information associated with this virus is consistently spreading. Which includes important things like problems and symptoms caused by this virus.

This reality has changed dramatically in these three months since the final update of the World Economic Outlook in Jan. The rare tragedy, the corona virus pandemic, has resulted in the tragically large amount of human lives being lost.

As nations use required quarantines and cultural distancing practices to be this pandemic, the world has been placed in a Great Lockdown. The importance and rate of collapse in action that has been is unlike anything known in our lives. This is the situation like no different, and there is considerable doubt about its effect on people’s lives and livelihoods.

A lot depends on the epidemiology of this virus, the strength of policy methods, and the process of medicines and vaccines, all of which are difficult to anticipate. Additionally,  some countries today face multiple crises—a health crisis, the financial crisis, and the collapse in commodity prices, which act in complicated ways.

Impact on GDP of COVID-19

In Country like India the economy was already weak before COVID-19.

Impact of Corona on India's economy is sure to be seen.  The condition of the country's economy was worrying even before the COVID-19 reached India.

The growth rate of the world's fastest growing economy was 4.7 percent last year. This was the lowest level of growth in six years.

In the year 2019, unemployment in India was at the highest level of 45 years and at the end of last year industrial production from eight major sectors of the country fell by 5.2%. This was the worst situation in the last 14 years.

Experts believe that due to the impact of the corona virus, where there is a crisis on people's health, on the other hand, the already weak economy may get a bigger blow.

The Government of India has announced a kind of measures to tackle this condition, from food safety and additional funds for healthcare, to sector relevant incentives and tax deadline extensions. 

On 27 March the Reserve Bank of India also announced the number of measures which could give accessible ₹374,000 crore (US $ 52 billion) to the nation's business structure. On 29 March the administration permitted the change of all important, as non-essential goods within the lockdown. On 3rd April the central government released more funds to these states for undertaking this COVID-19 amounting to ₹28,379 crore (US $ 4.0 billion). 

The World Bank and Asian Development Bank have approved aid to India to confront this COVID-19 pandemic.

Some of the steps taken by government to help poor people are as follows:-

1) PM Kisan Yojana

The government has sent Rs 18,253 crore to the accounts of 9.13 crore farmers under the PM KISAN scheme amid lockdown. Finance Minister Nirmala Sitharaman gave this information. Under the PM Kisan Yojana, the government sends a total amount of Rs 6,000 in three equal installments to farmers in their bank account in a year.

2) Pradhan Mantri Garib Kalyan Yojana

Pradhan Mantri Garib Kalyan Yojana is mainly divided into two parts. The first of these is the Pradhan Mantri Kalyan Anna Yojana. 80 crore poor people will be covered under this scheme. Under this scheme, five kg of rice / wheat will be given free for subsequent three months. Other than this, every family will get one kilo of pulses.

Under the Pradhan Mantri Garib Kalyan Yojana scheme, the Modi government is going to give the benefit of DBT to farmers, MNREGA, poor widow pensioners, Divyang, Jan Dhan Yojana, Ujjwala Scheme, Self Help Group (Women), organized sector workers, construction workers etc. and the elderly, the disabled and the widow will be given a lump sum of Rs 1000 in two installments.

India and the IMF - International Monetary Fund

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The International Monetary Fund (IMF) said on Wednesday that it supports India's timely decision to impose a nationwide lockdown to deal with the corona virus. A day earlier, the IMF in its World Economic Outlook had projected India's growth rate to be 1.9 percent in 2020.

                 image from commons.wikipedia.org

Chang Yong Ree, director of the IMF's Asia and Pacific department said, "Despite the economic downturn, the government enforced a nationwide bandh and we support the decision taken during India's time."

Moody's report on Indian economy

Moody's (Moody's) investor service on Monday reduced the ratings of Indian sovereignty. However, Outlook also changed from 'bad' to 'too bad'.

                           Image from livemint.com

Moody's Investor Service dropped the India rating (Indian Ratings) on BAA3. Also, the perception of India has changed from 'stable' to 'bad'. Moody issued a statement on Monday and provided details about it. Over the past few days, S&P and Fitch Ratings have also dropped the average for India. This is according to Moody's statement in a statement, "We have reduced India's unsecured amount from BAA2 to BAA3. At that time its short-term revenue was reduced from P-2 to P-3.

The biggest challenge for policy makers

This decision by Moody's is clear that in the future, it will challenge the policy-making institutions in the country. They will have to use the steps taken by them in the right way. By taking the right steps, the risk will gradually decrease.

Why is Moody's negate Outlook?

Moody said the main reason for the reduction was not just economic losses due to the COVID-19 outbreak. Moody said, "Today's decision has been taken regarding the COVID-19 pandemic. It is not motivated by the effects of the pandemic. The pandemic will increase the risk profile in India.

This was before the outbreak of COVID-19 and the pandemic has increased its risk even further. That's why we decided to make Outlook worse.

Moody's also said that even after the pandemic in India, there can be long-term fatigue.

The Government of India has also taken concrete steps, which should also be appreciated for helping the poor in this lockdown. But to save the ill effects of this crisis, more efforts are needed.