- The second deadly wave of Corona has posed serious challenges of employment and migration of laborers in the industrial and economic states of the country.
- The worrying scenario of increasing corona infection, which is visible, will increase the economic and employment challenge in the country.
According to an article published in Times Of India, Goldman Sachs in its report – 2021 has reduced India’s economic growth rate to 10.5 percent from the earlier estimate.
India’s Second Wave Effect
In such a situation, it is necessary to take some special strategic steps in view of the increasing concerns of the industry-business and workers due to the new challenges of Covid-19 across the country. Various measures like financial help and loan assistance announced by the government in the midst of the first wave of Covid-19 in the last year 2020 will have to be repeated again.
Economic Strive to Survival
Just as the state governments of Maharashtra and Madhya Pradesh have announced to provide free ration for three months for the poor, similar arrangements will have to be made in other states also taking strict measures like different types of lockdown. At this time, the intricacies of the Goods and Services Tax (GST) will also have to be reduced to give relief to the industry-businesses being affected by Corona. New relief for MSMEs will have to be announced soon.
Supply Chain Disruption
Actually the current situation is very difficult. Due to the panic of Coronavirus, the production work has stopped all over the world. Due to which exports have been badly affected. This is not just an economic crisis but a real crisis, which has badly affected the supply and demand. Monetary policy alone will not suffice as interest rates are already very low in Europe, so is the case with the US.
No Work, More Crisis
The impact of Corona can be clearly seen on businesses around the world, where companies are reducing their operations, employees are being asked to work from home and production targets are being reduced. The Organization for Economic Cooperation and Development (OECD) has projected a 50 basis point (from 2.9 percent in 2019 to 2.4 percent) in global GDP due to Covid in the first week of March in the Interim Economic Review Report. Significantly, 100 basis points is equal to one percentage point.
According to the WHO, the worst phase of the crisis of Covid-19 is yet to come. This crisis has also pushed unemployment to the highest level in America. By the end of March, a total of more than 66 lakh workers in the US had applied for unemployment allowance.
India’s Main Sector at its worst
The basis of Indian economy may be the agriculture sector. But, at present, the middle class and lower middle class are behind the development in the Indian economy. This is the reason why India is defined as a ‘middle income group’ economy. In the midst of the ongoing global crisis of Covid-19, two aspects are being discussed the most from an economic point of view in the Indian scenario.
First, the most vulnerable population of the Indian economy i.e. farmers, workers working in the unorganized sector, laborers migrating to the cities for daily wages and those who make a living by doing small business on the roadside in the cities. Second, the Indian economy produces the sector that produces capital and non-capital goods in this country. Generally speaking, the manufacturing sector.
Relief Package by Governments
Governments around the world are working on both these aspects. Governments have announced a big relief package to deal with the situation in their country and in the same sequence, the government of India has also announced a big package to help the poor.
The relief package issued by the government in the first phase is completely to redress the problems of the weak and unorganized sector people. The government has issued a package of Rs 1.7 lakh crore for this section, which is facing the economic crisis due to Coronavirus.
Big Economic Package
Globally, America has issued the biggest economic package for its economy. America has issued a relief package of 2 trillion dollars i.e. a total of 151 lakh crore rupees for about 300 million people. This is almost 5 times more than the total budget of India. This is for the entire economy of America.
India has not yet announced any major package for its manufacturing sector. It is expected that soon a big package can be announced in the near future as well. Along with the demand, a big economic package will be needed to restart the production sector, which is now going to see a supply-based crisis.
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Source: Times Of India
