In The Face Of Dual Crisis- Udita Nayak, XIMB

Undoubtedly, the ongoing Global Pandemic has taught us a great deal in terms of life and its often underestimated value. Maybe that’s why a plethora of debates is happening on numerous platforms questioning the government’s plan of actions from time to time. Most of these discussions highlight the priority of the government and its consequences. Life over Livelihood or vice-versa? What is the need of the hour?

Interestingly, in a poll conducted by “Edelman Trust Barometer”, the stats suggest that around 64% of people polled (in India) agreed that the top priority of the government should be saving as many lives as possible. On the other hand, 36% of people feel that the Economic Crisis should be given priority over the Health Crisis. They want the government to revive the economy that is being pushed to an unexplored deadly territory by a global pandemic. The poll results were no different in other countries. There also, the majority of the people voiced out to give priority to the health crisis over the economic crisis.

Source: Edelman

The popular old saying- “ If there is life then there is a livelihood” has resurfaced in a new light. Though we can’t undermine its importance, imbibing it in present times has given rise to several unforeseen challenges.

The Onset of an Economic Crisis

In a blink of an eye, the economic decadence has expanded its wings across the globe. Major Superpowers like the USA, Russia, UK, etc. are feeling helpless in the face of this pandemic. One after the other several nations have gone under the lockdown, India being one of them. Like everything else, lockdown came with its own set of pros and cons. Certainly, imposing the lockdown was a crucial step to break the neck of COVID-19, at the same time, it has caused turmoil at the economic front. India’s economy has been shaken to its roots owing to the lockdown. Here are some facts that highlight the deterioration of India’s economy that was facilitated by the pandemic:

  • Around 140 million people lost their jobs owing to the pandemic. Additionally, a large number of people faced salary cuts.
  • It has been observed that more than 45% of households across the country reported a drop in income in comparison to the previous year.
  • Around 53% of the businesses operating in the country were significantly impacted according to the survey conducted by FICCI in March.
  • In FY20-21, India’s growth rate is expected to be down to 2% from the previously predicted range of 4.7% to 5.2% (By the rating agency ICRA).
  • An estimated amount of Rs 32000 crore was expected to be lost every day during the first 21 days of the lockdown.
  • India’s stock market posted the worst loss in history on the 23rd of March, 2020.
  • There has been a huge disruption in the export and import sector of the country.
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The numbers above seem scary to many of us. The uncertainty ahead can’t be overlooked, no matter how hard we try. Every day, there is a headline that makes our heads turn. Our country is fighting a war on many fronts be it the pandemic or the LAC problem or the economic crisis or something else.

Nevertheless, we can’t deny the fact that India has already been struggling financially even before the onset of the pandemic. The Demonetization of notes in 2016 and the GST act in 2017 have done their part to aggravate our financial plight. Moreover, the country has also witnessed many banking crises such as the Infrastructure Leasing & Financial Services that further crippled the economy.

Source: Central Statistical Office

In January 2020 (when “Go Corona Go” was not making headlines in India), owing to its financial fragility, The International Monetary Fund reduced India’s GDP forecast for 2020 and GDP estimates for 2019. As per the data, the reduced numbers are still optimistic as compared to the bitter reality that we are dealing with.

The World Bank published a report in April 2020, focusing on South Asia. The report stated that India’s economy is expected to grow in the range of 1.5% to 2.8% for the financial year 2021. As per the report, the global pandemic has unequivocally magnified the existing vulnerabilities of the Indian economy.

It is quite easy to infer that the global pandemic is a huge blow to the country that is already grappling with numerous issues. What makes the health crisis even worse in India is the absence of proper health facilities. How can we ignore the inferior health care system of our country? If a country like Italy which is well known for its robust health infrastructure can fall prey to this virus, India’s struggle to control this virus with its humongous population is quite obvious.

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Also, how can we forget the distribution of the urban and rural population? What if the rate at which virus is knocking at the doors of rural households increases abruptly? How the government will bridge the existing gap regarding the sanitation practices? How the new normalcy will unmask in India? Many such questions are accommodating our minds and adding up to our worries.

The most intriguing thing about this virus is its novelty and uncertainty. It has given birth to a crisis for which governments were never prepared. The unknown damage that it carries with itself has made the future picture blurred and gloomy. The manner in which the things are going to unfold for the whole world in the face of the dual crisis is going to be one of a kind event.

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