On 24th March 2020, our Prime Minister Narendra Modi announced one of the most strict and rigorous lockdowns in the world to suppress the spread of coronavirus infections in India.
The pandemic induced a major health crisis and risked the largest economic shock not just in our country but also globally.
The first peak of covid cases was during Sep-Oct of 2020 then there was a decline but now daily cases are rising again, signaling a possible second wave.
According to the Economic Survey 2021, India’s reason to implement a stringent lockdown and India’s humane policy response was focused on saving human lives. The lockdown was made to be seen as a short-term pain to get better long-term returns, both in terms of lives saved and in the pace of economic recovery. Gradually, as the restrictions started to get easier, economic activities also picked up in a phased manner.
Our economy had not witnessed a technical recession until last year. The GDP growth was negative for two consecutive quarters. The GDP declined by a record 24.4% in the first quarter of the last fiscal year. This was extremely because of the severe nationwide lockdowns leading to loss of jobs and income for many.
As the COVID restrictions started to ease and there was a renewal of businesses, our economy withdrew from the technical recession phase in the third quarter of the last fiscal year with a rise of 0.4%. Recovery of many activities can be seen with the appearance of the COVID-19 vaccines. This pandemic has also pushed the world economy into recession.
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The crisis was also a major attack on the job market. The unemployment rate had increased significantly by a whopping 23.52% in April 2020 as many businesses had to shut down. The unemployment rate started improving from June 2020 when it was recorded to be 10.2% and it further enhanced to 7.4% in July.
The unemployment rate was high but to one’s surprise, there was a rise in the number of Billionaires in India. 40 new people joined the club making the total count to 177 Billionaires in the country. Reliance Industries chairman, Mukesh Ambani is still the richest in the country with a net worth of $83 Billion. He jumped to the eighth position globally in the list of Richest men.
Gautam Adani too doubled his wealth to $32 Billion during the pandemic making him the second wealthiest man in India and he climbed 20 positions to be the 48th Richest person globally.
The Sensex had reached its lowest in March 2020. It had crashed around 4000 points to finish at a record low of 25,981 points. The Market Capitalisation of Bombay Stock Exchange companies fell to Rs. 101.86 lakh crore. Adding up the worth of all the companies under the Bombay Stock Exchange yields Market Capitalisation. The Sensex almost doubled in January 2021.
Indian stock market and many Stock Market Advisory Company was hit hard on 12th April 2021 amidst the burst of coronavirus cases in Maharashtra as it is considering a lockdown. The Sensex crashed around 1500 points to 48,112 at the day’s low while the nifty plunged below 14,400. India overtook Brazil to become the second most affected country globally by the virus. A lockdown in one of the largest states like Maharashtra will affect the GDP severely. There is also a huge fall in the Rupee against the Dollar making 1$ equal to Rs. 75.04. Several Indian states are now considering a stricter lockdown and the markets are concerned over the impact on economic activity and GDP growth for the current financial year. Maharashtra saw a rise of over 63,000 cases and 381 deaths on Monday. The state is reporting to consider a two-week lockdown. This may have an immense impact on the economy as the state is a big industrial hub of the country. Businesses have become cautious due to the fresh surge in the number of COVID cases.
Marketers feel that the economy will not go down the way it did in April and May 2020 but this second wave can hamper the recovery process of the economy and delay the return to normalcy. It is a huge concern over emerging restrictions across states that are considering lockdowns and curfews.
There is a level of comfort than before as vaccinations are also happening at a rapid pace but the concerning increase in the number of cases may cost many people’s livelihood and the economy.