As we all know the corona virus global pandemic has taken a toll on all of us. Not just the people but many countries as well. Due to this pandemic, stores and companies all around the world were forced to shut down to prevent the spread of this deadly virus. Businesses have been forced to stop production of goods that people want and governments have started mass producing goods the people need. India's growth for the year 2021 is the lowest it has seen in three decades and India’s GDP estimates were estimated to decrease to negative figures, signalling a deep recession.
On 26 May, CRISIL; an Indian analytical company, announced that this will perhaps be India's worst recession since independence. Within a month, unemployment rose from 6.7% on 15 March to 26% on 19 April. During the lockdown, an estimated 14 crore (140 million) people lost employment while salaries were cut for many others and more than 45% of households across the nation have reported an income drop as compared to the previous year.
Unlike some advanced economies, India's tax incentives have largely focussed on going to subsidise credit to small businesses and farmers, while government consumption was limited to around 1% of the GDP, economists said. Businesses continue to make losses and fail to pay their workers wages due to the people buying their food and other necessities in bulk, leaving them with no remaining income to buy goods they want.
“We are expecting flattish profits, no growth, for the 2021 fiscal year,” said Gautam Duggad, head of research at Motilal Oswal Securities Ltd. He still sees more downside risks of earnings getting cut further “as we move forward and second or third order impacts manifest themselves.” Our economy has faced sever changes in a small amount of time and we do not know if it is going to change for the better.
Writer: Anaya Parekh
11/06/2020
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