The social distancing is not only social distancing but also economic distancing. “This is an economic Tsunami”. This lockdown in India resulted to stop work of the labourers or day to day workers who earn their daily living. A month ago, people were going to restaurants, malls, buying vehicles, purchasing new houses, etc, now these all activities are stopped, by which the whole economy has simply stopped.
At this moment, it may be possible that many small businesses may have to close their doors over the next several weeks. lockdown of few shops could be temporary; but in some cases, they might turn out to be permanent.
Fruit and Vegetables provide begin falling in a day because transportation hurdles and labours deficiency in the wake of the COVID-19 scare have derailed operations, convince several traders to stop operations from Wednesday although mandis may remain formally open.
Traders say the current situation will ravage farmers as their manufacture will start rotting, whereas urban consumers will face costs hike unless the authorities take urgent steps. “Most of the vegetables trading at Delhi’s mandi has stopped as farmers are facing difficulties in sending their produce, while the onward dispatches too have become difficult,”
We are telling people to cease their main source of earning. to slow a pandemic, we a forcing a great recession, perhaps a depression. This crisis in credit markets had changed economic behaviour – businesses were afraid to invest and hire and families were afraid or unable to spend. we are having an output gap. the output gap is a difference between what the economy could produce and what it is producing which is collapsing the economic demand.
The solution is simple – fill it with money, invest it, give families cash. If consumers will not spend then there should be someone who can spend on their behalf, create the economic demand necessary to push the economy back to normalcy.
We cut our growth forecast by sharp 90bps to 3.1% for the June quarter of FY21 and by 40bps to 4.7% for the full-year. we can also see the Reserve Bank cutting 100bps, up from 75bps in 2020, we are having a great recession. We count the GDP impact on the shutdown at 50bps per month. “We estimate a month’s shutdown will cost about 50bps of annual GDP” and exert the economy to come out only by FY2022 when GDP may print in at 6%.
Arun Maira, the former member of the Planning Commission of India and the former India Chairman of Boston Consulting Group, likens the situations to the Great depression of the 1930. “The economy is dying anyway. We have to see that the economy doesn’t die completely amid such a crisis,” says Maira.
As business close to help prevent transmission of COVID-19, financial concerns and job losses are one of the first human impacts of the virus;
Not knowing how this pandemic will play out also affects our economic, physical and mental well-being;
Despite this fear, businesses and communities in many regions have shown a more altruistic response in the face of crisis – actions which could help countries preparing for COVID-19