IMPACT OF LOCKDOWN ON ECONOMY

IMPACT OF LOCKDOWN ON ECONOMY

Introduction:

Across the globe biggest lockdown which shut a majority of the factories and businesses, suspended flights, stopped trains and restricted movement of vehicles and people, has also concerned issue in India economy where this biggest lockdown has been followed by Indian government successfully  to control today this faced pandemic (COVID-19).

However, this lockdown would be seems to many individual  differently, but according to analysts and industry bodies prediction it would be directly and indirectly caused country economy minimum Rs. 7-8 lakh crore during this first determined 21-day period!

Purpose of Review:

The article would describe:

•  The current lockdown challenges impacts on country GDPs.
• Three common economic sector of a country which have been much effected due to this lockdown.

CURRENT LOCKDOWN IMPACTS ON COUNTRY GDPS:

According to the a survey conducted by Statista the coronavirus which has brought this lockdown generated many challenges not only to the nation but also impacted all countries’ GDPs, where many country economy which effected by the lockdown, will be the lower global GDP growth in 2020, the effect radiating as far as Europe and the U.S. and even setting back global growth forecasts by 0.2 percent, which effects differently depending to re-normal their country economy activities.

IMPACT OF LOCKDOWN ON INDIA GDPs:

Comparing the worldwide data impacts on country GDPs; India, with an annual gross domestic product of approximately Rs 210 lakh crore, will lose about 4% of its GDP during the 21-day lockdown period.

One month of lockdown could potentially defer discretionary consumption of $45 billion on a pan-India basis, while if lockdown remains concentrated on urban areas it would have the impact of $22 billion,” said Prithviraj Srinivas, economist, Axis Capital.

As the above statistic shows the lockdown impacts on the country GDPs reduction therefore, the country has to work hardly for coming to normal activities of economy where the losses would be recover in short time.

SECTORS OF ECONOMY EFFECTED DUE TO LOCKDOWN:

Country economy is depended on various activities, where this ongoing lockdown effected every sector severely, thus; I will just put in context some important sector here as I am trying to reduce the length of the article with better image of understanding of these sectors linked with cause of GDPs. 

CIVIL AVIATION SECTOR: 

The India Aviation sector contributes $72 bn to GDP with having 464 airports and airstrips, from which 125 airports are owned by (AAI) Airport Authority of India. Hence; this growth in the country economy has increased the 8% of Gross Domestic Product and this high growth rate will be sustained for a good number of years, but unfortunately nowadays this sector domestic and international flights are not operating which cause directly the country GDPs very hardly, however; many diplomatic deals, tourist, students, products deliveries from overseas as well as from India and etc, are suspended due to international flights not getting on time.

AUTOMOBILE SECTOR: 

In India Automobile sector is one of the largest sector in the world which accounts India's gross domestic product (GDP) over 7.1%. It contributes country's nearly 22% of the manufacturing GDP. As we have been recently witnessed the world’s biggest lockdown to contain the coronavirus pandemic stalled operations, Automakers in India would be witnessed the worst-ever slump in sales as a prolonged slowdown. 

According to auto industry report passenger vehicle sales in India 2019-20 fell to 17.82 % over last year—also the worst ever—to 21,548,494 units.

March 2020 was one of the most challenging months for the auto sector as the 21-day lockdown resulted in bringing the production and sales of vehicles to a standstill, Rajan Wadhera, president at SIAM, said.

Conclusion: 

To sum up the above detailed information regarding the impact of current pandemic lockdown on Indian economy; where the fresh cases of coronavirus rise in India, the nation has started witnessing second-round effects of the virus spread has been a complete halt to economic activity, however; as the government has the responsibility to save nation lives, the lockdown came into effects with brought many challenges not only to the nation but as well as to business, transportation and especially this lockdown directly impacted the country GDPs. As this lockdown effected every sector severely, it will be worthwhile to mention for instance; “Automobile sector” where it is contributing gross domestic product (GDP) over 7.1%, which this 2019-20 year the sales of this sector in India would be in fell to 17.82 %.

AUTHOR: 

MASOODULLAH "SAMSOOR"

(49180337, MBA 4th Sem)