Let’s face the facts; COVID-19 has brought the most significant economic crisis in history. China, Japan, America, and every other economically healthy country is facing rescission. In Coronavirus India, GDP growth had halved from its peak.
After the lockdown that lasted two months, millions of retailers, small businesses, and factories found it hard to get up and to run as usual. It’s becoming crystal clear that things will take time to get back to the original state.
President of India’s mobile retailer’s association, Arvinder Khurana, says,
“At least 20% of neighborhood mobile shops that sell smartphones may never reopen again“.
Small businesses, new firms, and young startups are paying the expenses of coronavirus India.
Two Scenarios of Coronavirus India
If we stay positive and expect positive things, the virus may last one quarter. Individual startups & growing businesses will die but the economy will be back on track by the end of 2020. In this best-case scenario, India will suffer a short fuse in the economy but not a big rescission.
The worst-case scenario could be, the virus will stand tough and spread across the country, infecting billions. In that case, millions will die, and the economic destruction will be massive. The rescission will be worst than the one we faced in 2008.
Reasons Behind Rescission & The Great Fall of Economy
Owners of the businesses and startups have fled to their home towns and are yet to return. There are job losses, no proper business, and zero offerings of loans, there is no demand for high-profit goods.
Sales of non-essential items like clothes, furniture, electronics, etc. fell by 80% in May 2020. Moreover, even the purchase of essential things like medicines & groceries was dipped by 40%, as reported by India’s retail association.
The government is still clueless about procedures for the businesses and startups that are reopening. Sales are expected to experience a new all-time low as shops, malls & markets are on the verge of restoring.
Although essential businesses like grocery stores and medical shops were not halted, all experienced labor shortages, falling exports & low to no business activity. New safety measures and fear of coronavirus India spread are a few reasons of many behind the whole scenario.
Lack of Clarity from Government Is Postponing The Revival
Rajiv Bajaj, managing director of Bajaj Auto, said,
“I am not seeing that smooth, concerted, rhythmic movement towards unlocking.“
Kshitij Ghai, who owns a textile mill in the northern city of Ludhiana, said,
“Production is down by 50%, and demand is very weak.”
He says that it’s getting hard to bring the production back to the optimal capacity due to coronavirus India’s restrictions and other factors.
The government isn’t correctly assisting the businesses to start & revive the economy. There are 3 things the government needs to implement for small businesses and growing startups. Moreover, the labor force is dropped by a whopping 40% since coronavirus India. A lot of factors are contributing to the stage where it would be hard to turn the tables.
Can India Prevent Rescission?
India’s economy grew at only 4.2% in the financial year of 2019-20. It’s the slowest pace in nearly a decade, according to the data released by the government. Economists are predicting that India’s GDP for the year 2020-21 will be between -7% to 0, the worst since the 1970s.
Increasing business activities, easing restrictions, and working more than required are some factors that will help India to prevent rescission.