The entire world is currently facing a global pandemic of the covid-19 and ever since the beginning of this pandemic, India has entered in to a lockdown. This lockdown has bought the economic activity to a standstill and all hopes of the public for a turnover is being relied on the easing of restrictions. The easing of restrictions began in May for some-time. Due to the ease of restrictions, there has been various signs indicating recovery in the businesses. But looking at the larger perspective of lives versus economy, this side has entered into a critical stage where progress is vanishing.
As the government is taking certain measures to maintain a positive environment by pumping in liquidity in the markets, unlocking non-containment zones, there has been a positive impact for a short period of span. But in the longer run, what will come to the economy’s rescue, yet remains uncertain. Prachi Mishra, Chief India economist at Goldman Sachs said that there has been an improvement in the economic data that we may have seen recently, but that is a reflection of the normalization following extreme lows. It is quite unlikely that India’s macroeconomic fundamentals have seen such improvements.
Prachi Mishra adds up to her statement that, even though it is believed that in 2021 the policy support will help boost the economy, she believes there is no domestic fundamental force to drive the GDP of India from here on. It is believed that in the FY21, the GDP will contact by 4.4%, making it the worst recession since 1980. At this moment, the GDP estimates for 2020 is a bleak picture of sharp contraction. To make matters worse, since the reopening, the cases of covid-19 has been rising sharply. In today’s date, India has recorded over 24 lakh cases, and is the 3rd most affected nation after US and Brazil.
Reference: The Economic Times.
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