The economic impact of COVID-19 remained bigger than the health impact. After the great depression in 1929, it was one of the worst years in economic history. For India, it is not just a decrease in GDP numbers but a great degradation in the efforts of several years for progress.
The disruption in supply chains due to the Covid-19 outbreak had an adverse effect on the economies of several countries. Countries like India are now looking at boosting domestic production capabilities to absorb supply shocks. Countries also faced huge losses of revenue from tourism and other sectors. India is going through a phase of slow growth, rising unemployment and a strained financial system.
India is heavily dependent on Chinese imports and lightly on exports, thus several small industries and businesses are struggling. Its positive impact is assumed to reap the opportunities to replace Chinese imported goods with domestically produced goods. First time in many decades, the Indian economy has contracted significantly. The weaker sections of Indian society slipped back into poverty and unemployment.
MGNREGA scheme has proved to be bedrock during the Covid-19 pandemic. The government’s initiatives such as interest rate reductions, credit guarantee and liquidity enhancement schemes remained helpful. To revive India’s economy, the Government should inject confidence back into the entire ecosystem involving the consumers, entrepreneurs and bankers.