ECONOMY DURING COVID-19

The Coronavirus outburst has shattered world economies. Even developed countries like the US have been tainted by this disease. Due to the possibility of high levels of infection, many countries, including India opted to go into a state of lockdown, wherein all activities would be temporarily suspended and people would have to stay at their homes and adhere to the social distancing guidelines. As a result of this, most of the production activities also came to a halt, which led to a temporary break in the economic development of the country. Before the Coronavirus outburst, India`s GDP growth was around 4.8% and was expected to reach 6% for the Financial Year 2020-21. In the current scenario, the GDP has reduced to lower 1% and threatens to decrease further. 

I have used the word GDP a couple of times already. Let me give an insight into what exactly is GDP and why is it important.

GDP refers to the Gross Domestic Product which is basically the sum total of all the products which have been produced in the country during the Financial Year. Now, many of you may wonder as to why is GDP important? Well, it is just safe to say that GDP is the key and foremost important factor which shows the production capacity of a nation. Countries can only compete in the international market if they undertake production activities and deal in active trading. So, if a country produces in surplus, it will be able to export these commodities and generate an income from abroad which will go into the revenue accounts of the country.

When we talk about the GDP of India, the service sector is the one which contributes the maximum, then the industrial sector and lastly, the agricultural sector. Hence, when lockdown measures were imposed, it restricted the functioning of these sectors, thereby pushing the GDP of the country to a feeble 1% mark.

We must not only look at GDP as a factor but also the net credibility of the country in the international markets. Due to the Coronavirus outburst, the government had to allocate huge funds in the health care and medicine sector. We had to import lots of Personal Protection Equipment (PPE) and various other essential medical equipments. A positive aspect in this was that India was by far the largest producer of Hydroxychloroquine which is used in the treatment of the disease and hence it was able to export huge quantities of this medicine and was able to generate a marginal amount for the same.

But, looking at the overall view, India was heading straight into an economic crisis situation which in my view would have been worse than the 1991 economic crisis. Unless some reforms were brought into effect I would say we would have entered the crisis stage. 

Solution that the Government has brought into force:

The Central Government has conducted deep research and has come out with perhaps the only solution to secure economic growth by way of self-sustainability. The Atma Nirbhar Bharat Abhiyan was proposed by the honourable PM Narendra Modi. He announced a stimulus package of Rs. 20 lakh crore to overcome the economic situation.

The government`s main aim through this is to strengthen the MSMEs such that they can produce more commodities, including such items which we used to import from abroad. This will strengthen the production capacity of the country, reduce the number of imports and increase exports by producing a surplus of indigenous commodities. This will have a direct impact on the GDP of the country and will increase the National Income of the country.

If everyone adheres to and co-operates with the guidelines of the Government, we would be able to be a self-sustaining economy and overcome the economic difficulty due to the Coronavirus. This will also help in making us a visionary and pioneer in forming a strong economy and layout the basic fundamentals of a healthy economy to other nations. 

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