Chapter 1

Introduction

1.1 Introduction

A pandemic has had everyone's attention captivated since the early half of 2020.
Coronavirus Disease-19, or COVID-19, was its latter moniker after being first called
coronavirus. The virus started in Wuhan (China), yet despite this, it spread quickly
across the entire world, inflicting a humanitarian crisis and massive economic harm.
Nearly 436,000 casualties from COVID-19 were reported worldwide by the middle of
June 2020, which saw 8 million cases worldwide. Due to the rapid spread of the virus,
several healthcare measures were implemented by countries worldwide to control it
including social distancing (Fong et al., 2020).

Schools, businesses, institutions of higher learning, recreation centers, and

many others had to shut down. Public meetings were forbidden, and several nations
imposed lockdowns that restricted mobility to just the necessities. The goal was to
"flatten the curve," or reduce the number of emerging COVID-19 incidents, to cease
the disease's explosive growth, and lessen the strain on hospital facilities (John
Hopkins, 2020).

The spread of COVID-19 caused a noticeable downturn in national

economies. The global financial system was anticipated to decrease by about 3% in
2020, according to projections released by IMF (2020). In contrast to the international
downturns of 2008–2009, this downturn is expected to be much more severe.
However, the IMF revised its projection in June 2020 and increased it to a 4.9 percent
deficit for 2020. The next justifications are given in the report for this upgrade: (i) a
stronger desire to avoid social distance; ii) fewer operations during closures; iii) a
steeper decline in output among businesses that widened, and iv) more vagueness.

There are many diverse consequences on the labor markets, manufacturing

supply networks, currency sector, and the global economy, making the economic
repercussions diverse and unknown. The severity of the societal isolation measures
(such as lockdowns and similar rules), the duration of their deployment, and the level
of adherence, all affected the adverse global consequences in different ways.
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Furthermore, the epidemic and state involvement could worsen economic disparity
and hurt some socioeconomic and demographic groups more than others.

Pandemic breakouts have long been a source of suffering. Globally, viral

infections account for a significant portion of deaths. The epidemics that cause
influenza are continuous and therefore cannot be completely avoided. Because of the
emergence of novel viral strains as a consequence of virus re-combination, outbreaks
typically occur every 10 to 50 years (Potter, 2001). As the world's population grows,
we are inevitably going to come into touch with animals, which means that the current
population will be exposed to new viruses more regularly. People must take
precautions and act immediately if an epidemic is detected.

Despite the pharma sector's impressive expansion, viral infections are on the
rise as a result of increased traveling, trade, urbanization, changes in human behavior,
resurrected pathogens, and incorrect antibiotic usage (Verikios, 2020). The most
severe virus outbreak demonstrates how quickly contagious diseases expand to open
societies and endanger the economic viability of governments. Covid-19 is more
difficult since it is more contagious and can survive on objects. Since it is more
contagious than the flu and avian influenza, it is more devastating. Another issue is
the delayed development and approval of treatment therapies as a result of the initial
infection's significant economic damage and mortality. A further concern about this
virus is its ongoing evolution and durability of germs toward defensive medicines,
making them a constant and persistent menace.

The three main effects of an epidemic are its health, socioeconomic, and
governmental effects, which are each described here.

Health Impact
Epidemic effects on health are terrible. The number of fatalities during earlier
catastrophic events like the Black Death was 30–50%. Relevant to the current, 35
million individuals perished from AIDS and HIV in the 1980s. Additionally, in
Guinea, Sierra Leone, and Liberia in West Africa, Ebola 2014 resulted in 10,600
fatalities (Perry and Sayndee, 2016). The Zika virus treatment has long-term, chronic
impacts on the patient's condition. The indirect consequences of outbreaks on
wellness include the exhaustion of resources for normal healthcare, a decline in
routine immunization rates, and limited healthcare access owing to travel restrictions.

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During the 2009 flu season, a jump in hospital admissions for pulmonary and
influenza-related illnesses led to an increase in heart attack and stroke fatalities.
consequently, it might be difficult to distinguish between fatalities brought by the
virus and those that were simply incidental and brought on by other conditions.

Economic Impact
Epidemics typically have a long-term impact on economies all over the globe as well
as a short-term budgetary imbalance. Isolation, facility setup, contagious case
segregation, and infection prevention are just a few of the pandemic preventive
actions that are being used. Public health resources, personnel, and executing
expenses are all involved. Additionally, it covers the costs associated with setting up
medications, emergency aid, and personal safety equipment as well as costs related to
the health system's response to contagious illnesses.

Epidemics may lead to fewer tax revenues and increased spending, which
could contribute to an economic crisis, especially in poor economies which already
face severe budgetary limitations and inefficient tax systems. This economic impact
was evident in Liberia during the Ebola outbreak, which massively increased health
expenses, caused the country's collapse of, the economy, and reduced tax revenues
because of restrictions and quarantines. In addition to this, the pandemic's global
recession can be attributed to disruptions in mobility, employment closures,
restrictions on commerce and transportation, and closed land boundary.

Socio-Political Impacts

Intensified societal unrest, demographic shifts, and conflicts between states are only a
few of the significant sociopolitical repercussions that epidemics may have. There
have been numerous epidemics in history that resulted in significant demographic
changes, moral catastrophes, and sociopolitical unrest. According to previous studies,
pandemics in countries that have weak institutions lead to political unrest and conflict.
The public believed it to be a conspiracy, and as a result, there were riots and acts of
violence around the nation that included assaults on medical personnel, destruction of
medical equipment and supplies, and risks against them. Subtle social chaos caused
by the current epidemic includes worry, social exclusion, anxiety behavior, and
financial distress. Even while the current epidemic has improved relations in certain
countries, many others have suffered from hostility as a result of the finger-pointing.

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1.2. Background of the study

The COVID-19 outburst served as a reminder that epidemics, like sporadic natural
disasters, have occurred previously and continue to do so. Although we cannot stop
the spread of viruses, we may plan to lessen their negative consequences on
civilization. The second-most populated nation in the world and one of the nations
most severely impacted by COVID-19; India was the primary subject of the current
study. India was made more susceptible by its diversified demographic makeup,
following the state of its healthcare system and healthcare centers before the COVID-
19 pandemic.

There aren't enough professionals, nurses, and beds to handle an

exogenous event like an epidemic in India due to its lowest GDP. The COVID-19
spread can be controlled in part via social separation; however, it can be difficult
due to the high population density. Additionally, high blood pressures are co-
morbidities that affect more than 50% of India's older population, which may
make them more susceptible to getting COVID-19. The expected fatality rates
from COVID-19 are; however, lower in India since the average age represents the
reality that more than half the population is under 25.

Table 1.1 Outline of India's Population and Public Health Care System

Source: Health Policy and Technology, Vol. 10 Issue 1

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Monitoring the various demographic and health data across the nation is essential (see
Table 1.1), which includes a health-system summary. Age breakdown and population
density States around the nation have very varying average life expectancies.

In aspects of hospitals, beds, ventilators, etc. the health system varies greatly between
provinces owing to the disparity in healthcare costs. Even though the demographics of
Jharkhand and Kerala are identical, there is a nearly 3.5-fold difference in the
governmental sector's access to health facilities, and wards. Due to an obvious
mismatch between demand and supply for technology in healthcare in government
institutions, it will be incredibly challenging to manage the increasing number of
patients throughout the nation in the prevailing circumstances.

1.2.1. State-wise Evolution of COVID-19

Throughout the beginning of the outbreak, COVID-19 spread differently in each state,
as demonstrated by Fig. 1.1, which depicts the state-by-state progression of the
pandemic. As the early leader of India's response to this outbreak, Kerala won praise
from the UN. Following a sharp increase in cases, Kerala's trend was approximately
constant until day 40.

Public and private healthcare finance programs coexist in India; however, at minimum
75percent of people do not have any kind of policy. Additionally, the commercial
sector in the country provides 58percent of health facilities and 81percent of
physicians. Initially in the epidemic, government hospitals took part in COVID-19
treatment and tests. Due to a lack of public health facilities and a spike in incidences,
a shift in the policy addressing the inclusion of the private sector in COVID-19 testing
and care was necessary. One of the lowest percentages of any nation in the world, the
public sector in India contributes about 20% of all healthcare costs or about 1% of
GDP. The corporate sector's remaining 80 percent contribution is intended to finance
and infrastructural development. In public hospitals, Ayushman Bharat's 500 million
consumers received free care and diagnoses, although tests (US$44) and treatments
were more expensive in private healthcare. The Govt, for instance, placed a daily
limitation for isolating units at USD 160–200 for isolating beds, USD 260–350 for
ICU beds without ventilators, and USD 300–360 for ICU beds with ventilators. Every
country on earth has seen a considerable impact from the current outbreak, and it
doesn't appear that any will be spared. Additionally, economics, which has had a big

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influence on how businesses and customers behave hurts society as a whole. The
discourse doesn't begin with how the COVID-19 outbreak has affected the economy
over the previous years. While the epidemic may diminish and the abrupt and

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unprecedented breakdown of output, trade, and jobs may be reversed, historical data
indicates that long-term economic implications may last for generations or longer.

Table 1.2. State-By-State Comparison of India's Public and Private Health

Systems

Source:: Health Policy and Technology Volume 10, Issue 1

One of these is a protracted duration of low actual interest rates, which can last for
twenty years or longer and is comparable to stagflation. However, there is some good
news in that these extended stretches of low borrowing costs are linked to increased
real incomes and give governments plenty of flexibility to finance stimulation
programs to offset the pandemic's economic effects.

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Research on the COVID-19 pandemic's financial impact has thus far understandably
concentrated on the short-term effects of abatement and prevention measures. Yet, it
is crucial to comprehend how the economy will develop over the next few years and
decades as states implement extensive budgetary counter-mitigating initiatives. This
environment will affect fiscal and monetary policy in ways that are not being fully
comprehended.

This vacuum can be filled by studying past pandemics, such as the Black Death in the
1300s, which shed light on their medium- to long-term economic repercussions.
Below is a list of the fatalities from previous pandemics:

Table 1.3: Pandemics and deaths

The stability rate that would maintain the economy developing at its maximum rate
with steady inflation is known as the natural, or neutral, rate of interest. The natural
rate is ultimately determined by the overall supply and demand of loanable money
among depositors and borrowers.

A crucial economic indicator is a constant rate. For instance, when populations

become more thrifty, the relative supply of deposits rises; when the momentum of
fundamental progress slows, capital becomes less alluring; in both circumstances, the
natural rate shrinks to reestablish stability.

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According to Jorda, Singh, and Taylor (2020), outbreaks can have a long-lasting
impact on interest rates. About 20 years after a pandemic, the natural rate of interest
responds by tilting downward by about 1.5 percentage points. These figures are
astounding and reflect the significant economic impacts pandemics have had
throughout history. It is generally known that real safe rates, which are closely related
to the sustainable rate, can be dropped for 5 to 10 years following significant
recessions brought on by financial meltdown (Jordà, Schularick, and Taylor 2013),
but the responses here are even more persistent.

In the advent of an epidemic, citizens are momentarily less inclined to invest and
become more concerned with saving wealth, which slows growth in the economy.
Given the current state, shareholders might not be as careful as they have
been previously when maintaining investment yields lower rewards.

The evidence offered by Singh and Taylor (2020) is in line with the well-established
neoclassical development model. The relative gains to labor and capital are
rebalanced when there is a loss of labor without an equal loss of capital. Increased
savings by pandemic survivors may also contribute to the subsequent falling interest.
These people might be more circumspect out of wisdom or maybe they just want to
make their wealth back.

If this hypothesis is accurate, an opposite pattern will be observed after a very

different kind of historical event—war—which likewise causes a lot of human
casualties. Massive civil wars, unlike outbreaks, also destroy agriculture, land,
buildings, and infrastructure, or the loss of investment.

The important historic epidemics of the last millennia were largely characterized by
periods of the low market return. These reactions show that outbreaks are
accompanied by longer durations of persistently low real rates of interest that last for
several decades, as determined by divergence from the natural rate of interest.
An absence of required investment, a growing need to preserve due to caution,
growing uncertainty, a desire to refill diminished assets, or perhaps combined, may be
indicated by a surplus of assets per unit of sustained labor. Secular slowdown
(Summer 2014) would be a problem for financial and monetary stabilization policy

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for the next twenty years or more if the historical patterns emphasized continue to
manifest themselves similarly following COVID-19.

However, if natural rate decreases of 1% to 2% are anticipated this time? The natural
rate's drop will probably be slowed down by at least three different variables.

 First, if contemporary medical treatment and public health initiatives are more
successful, the number of fatalities from COVID-19 relative to the entire
society may be lower than that of several of the big catastrophic events of the
past.

 Secondly, COVID-19 mostly impacts older people who are no longer working
and have a tendency to save more money than younger people, which is a
significant change from earlier centuries when life expectancy was lower.

 Third, the vigorous economic growth to combat the epidemic will increase the
budget deficit, even more, decreasing the global investment rate and
eventually pushing real interest rates higher.

Overall, dampened by the variables we discussed, a protracted period of lower real

interest rates is still anticipated. Low real rates should then give governments the
fiscal breathing room they need to take proactive action to lessen the pandemic's
effects.

1.3. The Current Global Scenario

New dangers from COVID-19 pressures, as well as inflationary pressures,

indebtedness, and financial imbalance, might endanger the resurgence in emerging
markets, based on the global bank's most recent International Economics Perspectives
study. Based on the Omicron variant's rapid expansion, the outbreak will most likely
keep causing economic harm in the coming years. Foreign marketplaces in
underdeveloped and emerging nations will be impacted if rich nations like the US and
China experience a significant recession. When governments in many developing
nations lack the legal and regulatory framework to boost production if required, new
COVID-19 outbreaks, persistent demand limitations, price inflation, and increased
financial instability in large areas of the globe may increase the risk of a rocky

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landing. Following the outbreak for 2 years, the financial system is still racked by
significant problems to the resurgence of recombinant mutant surges, supply
constraints, and a rise in hyperinflation in both developed and developing economies.
Additionally, the anticipated drain of resources by significant financial institutions
during the coming year may increase volatility in international investment
transactions. It is crucial to assess the robustness of the fiscal stabilization markers in
this situation as well as the speed of National economic development comeback.
Advancement in immunization is particularly crucial to consider because it serves as
both a health defense and a safeguard against the pandemic's recurring stages'
negative effects on the economy.

Positive Effects

Although Covid-19 had many harmful effects, there were some favorable elements as
well. The surrounding area was made clean and wholesome. The water and air
became more suited for breathing and supporting life. Economically, it benefited
small businesses and the pharmaceutical industry. Authorities from all corners of the
globe have committed trillions of dollars to a Covid-19 vaccine and treatments.
Holdings of some pharmaceutical companies engaged in the creation of vaccination
have soared. AstraZeneca, Moderna, and Novavax all experienced notable increases.
However, Pfizer's stock price has decreased. Investors' confidence in the company to
have higher revenue in 2021 has decreased as a result of the cooperation due to
BioNTech's expensive vaccine manufacturing and operating costs as well as the
growing number of competitors with comparable shares of the market.

Since the onset of the pandemic, It has become evident that the virus has
consequences that transcend death and morbidity for the individuals who die. —those
who become ill or are responsible for those who become ill and are not able to work
for a while. Global supply networks have been affected as a consequence of the
various economies' decelerating and productivity pauses. No matter how big the
company, productivity has begun to decline for China-dependent businesses
worldwide.

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Fig 1.2. Percentage Change in Share Value

Source: Bloomberg

The fact that international transportation is constrained and even prohibited has
further slowed down economic activity worldwide. Most importantly, a modest
amount of worry among firms and customers has changed regular consumer habits
and create irregularities in the market. Metrics for world stocks have declined, and the
global financial markets have also responded to the adjustments. In addition to having
an impact on numerous sectors, this outbreak has brought about the following issues:

The Decline in The Stock Market's Value

Shifts in the stock markets, wherein shares of companies are traded and bought could
have a massive effect on how elderly' or individuals’ bank deposits are valued (Isas).
Stock markets experienced major drops in value during the early part of the crisis as
the number of Covid-19 outbreaks increased. Since the inaugural vaccination was
released, the stock markets in South Asia and the United States have rebounded, but
the FTSE is still falling. The FTSE posted its worst performance since 2008-2009 in
2020.

As a result, interest rates have been lowered by numerous central banks, including
those in the UK. Theoretically, this should lower borrowing costs and promote
expenditure to boost economic activity.

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Fig. 1.3: Stock Market Movements

Source: Bloomberg

This year's January had seen some investment growth, even though this is a common
event called the "January effect," Experts are worried about the potential for
additional lockdowns and delayed vaccination campaigns that could result in
increased market turmoil this year.

Unemployment

The US' yearly rate of unemployment has surpassed 8.9%, based on the International
Monetary Fund (IMF), bringing a stop to decades of job creation. Government-
sponsored employment initiatives have been put in place to motivate thousands of
people since several areas of the economy, such as the tourism industry and the
hospitality industry, have almost imploded. There are still incredibly fewer new
available jobs in many countries. While job opportunities are still dropping in other
countries, except Australia where job opportunities have stabilized.

Economic Deficit

The outbreak hasn't significantly affected our target for the shortfall in our finances
and lack of investment. The fiscal deficit objective for the two years between 2021
and 2022 was declared by Finance Minister Nirmala Sitharaman in this year's budget
announcement. The originally anticipated GDP was boosted for the years 2020–21.

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The budget shortfall for 2021-2023, according to the administration's medium-term

economic plan.

Fig. 1.4. Yearly Unemployment Rate Change from 2019 to 2020

Source: IMF

The Impact of the Lockdowns and Restrictions

The length of time it took for the economy to recover was determined by how much-
localized lockdowns and restrictions were enforced in history. A consistent fiscal
stimulus that lasts the entire year is possible. Financial stimulus is also achievable in
some cases if businesses are given access to financing at cheap interest rates. India's
precarious economic recovery has been delayed by the second wave. The recovery
has been hindered by growing inequality and a stressed family budget. India's
economy has essentially been halted in its tracks, rising by only 4% in 2019–20,
shrinking by 7-8% in 2020–21, and then recovering at a modest rate in 2021. As a
result, fiscal policy needs to extend a big helping hand to guide ailing families and
companies toward improving the economy.
The Organization for Economic Co-operation and Development (2020) reports that
the initial quarter of 2020 saw the lowest GDP growth for the G20 since data have
been kept in 1998 at -3.4%. The decline escalated to -6.9% in the 2nd quarter of 2020,
demonstrating that the damage to the economy was greater than the -1.5% hit during
the global recession of 2008 In the first quarter of 2020, the United States saw a shock
of -1.3%, which dropped to -9.1% in the 2nd quarter; the United Kingdom saw

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decreases of -2.2% and -20.4%; and France of -5.9% and -13.8. In Asia, India saw a
0.7% first-quarter shock and a -25.2% second-quarter shock; Korea experienced a
1.3% and a -3.2% shock; Japan experienced a 0.6% and a 7.9% shock; and China
experienced a 10.0% and 11.5%. The International Monetary Fund (2020) forecast a -
4.4% yearly rate of growth for the world in 2020 based on the outbreak and related
restrictions measures. 2020 saw only China's significant economy expand. A 2.3%
increase was recorded. On the other hand, the IMF expects a 5.2% world economy in
2021. China and India, which are predicted to grow, correspondingly, will be the main
drivers of that. In major, highly reliant on resources countries that have been severely
harmed by the crisis, recovery is predicted to be protracted.

Fig. 1.5. Real GDP Growth

Source: IMF

1.4 The Current Indian Scenario

When the epidemic struck in March 2020, India's ability to handle a new disaster was
poor. All areas of the Indian economy were impacted by the economic crisis that
commenced in March 2020. Farmers in the agricultural industry had to contend with
faulty supply chains, a scarcity of market outlets, weak demand, and declining output
prices. Micro and small businesses in the market were the most severely impacted.
Approximately 15 million jobs were lost as a result of the downturn.

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Health and Social

India also made further improvements, such as creating backup plans in case of an
expected increase in cases. A total of 2,500 railroad coaches were transformed into
isolation wards, adding 40,000 beds to the available supply. At the city, municipality,
state, and local levels, clinical personnel, including volunteers, former service
members, homeopaths, and ayurvedic professionals, have been recognized. Each was
labeled a "COVID warrior," an observation strategy for 1 COVID warrior per 250
individuals had developed. It was crucial to meet the demand for healthcare supplies
and drugs with the rising availability of infrastructure and human resources. Private
hospitals' participation enhanced the need for PPE.

Regional Division

Based on the number of recorded cases on a particular day, a town's geographical

areas were categorized as red (more than 15 cases) orange (15 cases maximum), and
green (0 cases). Geographical areas that had a prevalence of cases reported (above 6)
have been referred to as containment zones, specifically in densely populated places
where societal isolation was simply possible. Here, are some specific
recommendations:

• Access only after having a COVID-19 preventative medication.

• There are specific helplines for medical checks, sanitization initiatives, and the
supply of vital products.
• Travel to other locations is prohibited, and those who violate this are punished
under the Indian Penal Code, the Epidemic Diseases Act of 1897, and several
parts of the Disaster Management Act of 2005. (IPC).
• Within four weeks of the last recorded case's discharge, zones were
reevaluated.
The steep learning curve encountered during the 1918 influenza A virus (H1N1)
pandemic in India served as the foundation for the zonal categorization idea. The
former epidemic taught us, among other things, that while a virus may spread
quickly among the Indian population, it is unlikely to propagate equally
throughout the entire nation.

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Economy
In comparison to its previous prediction of 10.1 percent, the World Bank has reduced
India's GDP projection for FY22, the financial term beginning April 2021, to 8.3
percent (March 2020). It has also been predicted that India's economy will be 7.5% in
2022, even though the country's resumption is being impeded by an unusual 2 nd phase
of the outbreak, the greatest breakout throughout the history of the fatal epidemic.
The Bank predicted that the global economy will expand in 2021, which is the
strongest rate of expansion since the terrible recession’s end 8 decades prior. GDP
expansion of 8.3 percent is anticipated for India in the financial year 2021/22
beginning in April 2021. The second Covid-19 wave is projected to be extremely
destructive, and since March 2021, there have been localized movement limitations as
well. Despite the forecast's upward revision of 2.9 percent, this still indicates severe
expected economic harm. The breakdown and resurgence experienced during the
initial wave of movement are anticipated to occur again, but with a lower intensity.
According to the projections, the epidemic will hinder investment and
consumption since trust will stay low and financial accounts will be harmed.
According to the report, growth in FY 2022/23 is predicted to drop to 7.5 percent due
to COVID-19's continuing effects on the household, business, and bank balance
sheets, likely low levels of consumer confidence, and increased uncertainty around
future employment and income opportunities. The World Bank claims that India's FY
2021/22 budget represented a substantial policy shift.
To mitigate the economic fallout from the epidemic, the government declared
that wellness spending will be more than double. It also laid out a modified medium-
term budgetary path. The Reserve Bank of India (RBI) proposed additional steps to
strengthen financial assistance to micro, small, and medium-sized businesses in
response to worsening disease outbreak trends. The RBI also eased regulatory criteria
on the accounting for non-performing loans.
To speed up the post-pandemic recovery, India's fiscal strategy changed in the
FY 2021/22 budget to increase spending on infrastructure and healthcare. To mitigate
the health and financial implications of the resurgent pandemic, however, additional
specific policy assistance may be needed.
India's economy has miraculously recovered from the Covid-19 outbreak and
statewide lockdown during the past year, As stated by the World Bank, it is still not
entirely out of the woods. It had predicted that the country's economic real GDP

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expansion for fiscal year 21/22 may range from 7.5 to 12.5 percent in its most current
Southeast Asia Economic Focus research, which was released ahead of the World
Bank and the International Monetary Fund).
Official statistics indicate that the Indian GDP declined by 7.3percent in the
April–June quarter of 2021. This is the largest decline ever observed by the ministry
since it started compiling quarterly GDP numbers in 1996.
Following the lockdown's implementation in 2020, it was anticipated that 10
million migrant workers will return to their native countries. What was unexpected
was that neither the state administration nor the federal government had any
information about the migrant workers who lost their employment and their
livelihoods as a result of the shutdown.
The epidemic has caused the global financial system to experience difficulty
during the previous two years. Periods of exceptionally difficult regulations have been
brought on by recurrent waves of severe infection, supply-chain breakdowns, and,
subsequently, inflation. The Indian government has responded swiftly to these
problems by putting in place a variety of safety net programs to mitigate the effects on
the underprivileged and the corporate sector. It follows forced through a huge rise in
infrastructural improvements to boost short-term consumption and actively pursued
supply-side policies to get the market ready for sustainable long-term
development. During difficult times, the economic market is a constant source of
potential hardship. Like many other global financial markets, India's financial markets
have performed remarkably well, enabling a record-breaking mobilization of capital
investment for Indian enterprises. More importantly, the banking sector is well
capitalized, and even after accounting for certain lingering effects of the epidemic, the
overhanging of non-performing accounts appears to have systematically decreased.
Measures of fiscal consolidation generally point to the Indian economy being
prepared to meet the difficulties of 2022–2023. The Indian economy is in terrific
shape for several different reasons, including its distinctive action plan. Indian
government chose to utilize safe work for marginalized communities on the one hand,
whereas adjusting incrementally primarily on Bayesian-updating of data. This was
instead of pre-committing to a rigid reaction. The Economic Survey from the previous
year highlighted this "barbell technique." The usage of 80 High-Frequency Indicators
(HFIs) in a highly variable workplace is a crucial component of this adaptable,
iterative "Agile" methodology. Due to the unexpected lockdown at the center,

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Economic growth had fallen to 23.9%. In 2020–21, India's GDP declined by 7.3%.
Since freedom, this was the Indian economy's poorest year ever in terms of overall
performance. India's GDP growth rate right now is probably under 10%.
For the financial year 2020–21, the Controller General of Accounts data
estimates a gross tax revenue (GTR) of 20 lakh crores and net tax revenue of 14 lakh
crores. The estimated gross and net tax collections for 2020–21 would be 22.7 lakh
crore and 15.8 lakh crore, respectively, due to the tax revenue rise of 12 percent.
As compared to the budget amounts, this predicts some additional net tax
receipts to the center of Rs 0.35 lakh crores. The non-tax revenues and non-debt
capital receipts may still account for the majority of the anticipated deficits. If we go
back in time, we can see that the production levels for non-tax revenues and non-debt
investment income have fluctuated, but when we add them all up, they averaged just
under 15% in the five years before 2020–21.
The impact of COVID-19 on several industries:
Hospitality Sector
The hospitality industry is in danger of seeing another 2020 since so many states have
implemented localized lockdowns. The hospitality industry comprises a wide range of
companies, including eateries, bed & breakfasts, bars, nightclubs, and more.
Prohibitions and bans implemented by the states have severely hurt the industry that
has accounted for a sizable amount of India's annual GDP.
Tourism Sector
The hotel industry and the travel industry are interconnected. Following the first
phase, the industry that supports millions of people began to recover, but the second
phase of COVID was returning to do even more destruction. The annual GDP of India
is over 7% derived from the tourist industry. It includes lodging options like hotels,
inns, and lodges.
Aviation and Travel Sector
During the second phase of the epidemic, airline and other industry businesses had to
contend with a great deal of difficulty. Due to the public's fear of leaving their house,
the larger travel industry is also suffering. Whether individuals choose such services
in the coming years will determine whether airlines and the tourism sector as a whole
recuperate. The future of airlines and the larger tourism sector doesn't seem promising
at the moment.

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Automobile Sector
In the short term, the covid-19 scenario in India is anticipated to put more strain on
the automotive industry.

Real Estate and Construction Sector

As a big number of migrant workers have departed the major cities during the second
wave, the building and real estate industries have begun to experience disruptions. As
of 2020, the condition in this industry has not been critical.

Manufacturing

Diverse manufacturing industries worldwide have been impacted by the outbreak. The
worldwide distribution system of the major industries was affected because the
outbreak first happened in East Asia, the world's manufacturing hub. The industrial
industry will take similar damage if the virus continues to spread over the globe. A
significant supply shock to the industrial sectors in the less afflicted countries will
result from the supply management contagion. Due to the epidemic, the less afflicted
countries will have a tougher time importing raw materials and finished goods from
the hard-hit countries. Due to the economic decreases in aggregate consumption
demand, there will thereafter be a disruption in demand in both less impacted and
hard-hit countries (Baldwin & di Mauro, 2020). Before the outbreak, the Indian
economy already having a difficult time regaining momentum. The ongoing COVID-
19 outbreak in India has made a comeback unlikely, though, as it is hurting several
economic sectors. The impact is already being felt in the automotive and healthcare
sectors. The distribution system for medicinal raw resources has been severely
impacted because of the pharma industry's close ties to China. India is regarded as the
world's foremost supplier of medications, although it primarily relies on the import of
large quantities of medications. However, supply chain interruptions have also had a
significant negative impact on the Indian vehicle industry. According to a report by
the British Plastics Industry, sales of new cars in the United States have decreased by
40%.
Nearly 80percent of respondents of participants predicted a decline in trade
over the following two quarters, with 98% admitting anxiety about the profound
consequences of the outbreak on the company. Federation covid-19 is having a major
effect on manufacturers in the UK (Prem et al, 2020).

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 Chapter 1

The first nationwide shutdown in India was declared almost two years ago. When the
outbreak broke out, there was a discussion about a trade-off between life and one's
livelihood. It became apparent that India performed badly in both aspects as it battled
with the 2nd wave.

Despite being efficient in some parts of lockdown rigor, India's policy

approach failed to address the crisis's public health and fiscal implications.
Additionally, it fell short of protecting the most defenseless segments of the
population from the crisis' devastating effects. The second wave saw an increase in
public spending, but the most recent data indicate that the GDP and labor participation
rate is still below what were before the pandemic.

To address the issue, the Indian government has unveiled several initiatives,
including tax schedule expansions, more funding for health, and bonuses specific to
certain industries. To lessen the impact of the shocks on business entities both in the
formal and the informal domains and to assist them in navigating the emergency is the
immediate priority of the governmental measures to the economic consequences of
COVID-19. An initial first-round fiscal and monetary policy announcement has been
unveiled by the centralized administration and RBI, respectively. Several state
administrations have also disclosed monetary stimulus plans.

A never-before-seen threat has been presented to India by COVID-19.

Shutdowns and other societal segregation restrictions would be hugely destructive
given the massive population size, the fragile state of the business, particularly the
financial services in the were before period, and the economy's reliance on unofficial
labor. Governments at all levels, including the federal and state levels, have
acknowledged the problem and taken action, however, this is only the first step. To
lessen the effect of the disruption for both the official and medium enterprises and
create the way for a V-shaped comeback, authorities must be equipped to ramp up the
reaction as circumstances deepen. To protect the economic system from suffering
protracted harm, they must also make sure that the answers continue to be governed
by a set of norms and place restrictions on the use of judgments.

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