The globe today is facing a pandemic situation and India has not remained untouched by its negative influence. In fact, as per the BSE Chairman Mr. Sethurathnam Ravi, India is the most disruptive considering the economic situation and human lives loss. Nearly every sector has been adversely affected during this period. The reason behind this adverse effect as per S. Ravi was the domestic demand and the supply or exports that sharply dropped with noteworthy exceptions.
An effort was also made for analyzing the effect and the possible solutions for particular essential key sectors. Among all Aviation, hospitality, and tourism were the most affected sectors which faced the maximum burden of the crisis. As per the reports of UNCTAD, the trade of India faced a loss of around USD 348 million due to Covid-19. This came up with an adverse impact on the production, as well as the inventory available. The loss of the pharmaceutical industry is also essential as China exports around 70% of the APIs to India. These APIs are essential for the manufacturing companies who are producing various medications in the country which leads to a huge loss and financial erosion.
Similar to the health sector as mentioned by S. Ravi, the banks have also faced a contrary situation for responding to an impulsive situation. Along with these sectoral impacts, demolishing buyer and business opinion can lead firms to expect lower interest, ascend in business cost and diminish their spending and speculation. A similar will affect all installments including those for representatives, interest, advance reimbursements, and expenses. Thus, the equivalent would fuel business terminations and employment misfortunes.
Let’s check on some of the critically affected sectors as listed by the BSE Chairman.
- Real Estate
The real estate and construction sector started facing disruption as during the pandemic situation a huge number of migrant workers left for their villages. This lead to a lack of required laborers for both construction and housing projects in the states and urban areas. As a result, a delay in the completion of projects was observed. As per S. Ravi, the labor unions have confirmed that more than 2 lakh migrant laborers left Delhi NCR during the lockdown and returned to their hometowns every day. This means the construction sites were working with even less than 50% workers along with other disturbing situations like shortage of raw material, and much more. Even currently the sector remains troubled resulting in several pending projects.
- Aviation and Tourism
Tourism and Aviation contribute around 9.2% and 2.4% respectively to the GDP of India. Both the industries were the first to get affected significantly by the lockdown due to Covid-19. As per the reports, the pandemic situation has obstructed these industries more than the situation that arrived during the Financial Crisis in 2008 and 9/11. The industries have faced issues with cash flow from the very beginning of the pandemic. Also, due to the situation, nearly 38 million people lost their jobs which counts for almost 70% of the workforce including both Blue and White-collar jobs. As estimated by IATO, the industries would have suffered a loss of around 85 million Rupees or even more due to the traveling restrictions. Counting on the plus points, various innovative changes are implemented for contactless boarding traveling technology.
Next on the list is the automobile industry. The automobile industry is again under pressure as due to the pandemic the sales have drastically fallen. India imports around 27% of the automobile parts from China, and due to Covid-19, the delay in the import has resulted in deferrals in the production of vehicles and their delivery. The increase in the estimated loss has forced various manufacturers to temporarily close their companies. As per the suggestion of the BSE Chairman S Ravi, waiving the interest for a fixed period might be helpful to the manufacturers to a great extent. Again, subsidizing the market for manufacturing OEM or electric vehicles and components would help in managing the loss as well as the demand of the public as this would also reduce the consumption of petrol.
Apart from all these, other sectors that are affected tragically include the shipping industry, food and agriculture, electronics, hospitality industry, banking, financial industry, and many more. Hence, the economic crisis prevailing currently needs the implementation of particular effective policies in an instant manner. The government needs to primarily focus on reducing the impact of Covid-19 by serving with quick resolution of pending cases and screening awareness. This would help in restricting the chain of the outbreak and the sectors would be in action again which would vastly boost the economic activities.