Indian economy in 2019-20: If you write on the economic events of the last year, then the impression of Covid-19 will definitely be seen on it. When the whole year has been under the influence of Covid-19, no economic evaluation can be done beyond its scope. However, its economic evaluation should be understood by dividing it into two aspects. An economic assessment of the part that preceded the Covid-19. It will be of short duration. While the ongoing decline in the economy will be discussed before Covid-19 and the 2020 general budget which is its goal due to this global epidemic .
Indian economy before Covid-19 Before the arrival of Covid-19 crisis, the Indian economy had entered its worst phase of two decades. Demand and consumption from the market was decreasing. The government was trying to revive the market through economic packages and liberal announcements.
The Indian economy was at a 45-year low on the basis of nominal GDP. Was at the lowest level of 11 years on the basis of real GDP. The unemployment rate was the highest in the last 45 years and rural demand was at the lowest level in the last 40 years. Agricultural growth rate was also at its lowest in a decade and there was no positive news in terms of agricultural income.
The confidence of consumers in the market was declining. NPA of RBI was touching the figure of 10 lakh crores. Financial fraud was more than 2 lakh crores in the last year. The conclusion of all these facts is that the picture of the Indian economy had become very blurred before Covid-19. Covid-19 was the last nail in the coffin of the Indian economy.
Indian economy in 2019-20
Economy after Covid-19
Covid-19 has been a phenomenon which has affected the human race in every way, social, economic, political etc. The greater health catastrophe has been, is coming in the form of economic catastrophe.
The Indian economy shrinks by -23.9% in the first quarter of FY 2020-21. However, this figure is also just a smaller format of the economy. The unorganized sector accounts for 94 percent of the Indian economy, which accounts for 45 percent of the country’s total production. GDP is calculated on the basis of the remaining 6 percent organized economy.
The lockdown imposed during Covid-19 has the most negative impact on the unorganized sector of the country. Therefore, this figure of GDP is truly even more frightening. Most of the jobs have gone to the unorganized sector. Most of the businesses have closed down in the unorganized sector. Therefore, this year has been the most frightening phase of the Indian economy as an unorganized sector.
Secondly, the lockdown has affected the Indian economy in both demand and supply formats. The Indian economy had gone into a demand-driven slowdown even before Covid-19. There were reports of production cuts and employment cuts from every sector.
Covid-19 transformed this entire recession into a ‘demand and supply based recession’. Due to the lockdown, people lost their jobs and business closed, then the demand in the market further decreased.
At the same time, the supply of all services, apart from essential services, was also stable for a long time. However, the second quarter figures indicate a return to the economy again. But at the same time, according to the Reserve Bank’s estimate, the economy will grow at a rate of just 0.1 percent in the third quarter.
Forced government to reduce expenses
The financial unavailability due to Covid-19 also forced the government to spend less. The government’s tax revenue is going to fall at the rate of 10 percent. This is a sign of a large financial deficit.
This year, the government has cut its expenditure by a total of 22 percent. There is also a reason that the demand in the Indian market is not increasing. Since private companies are already upset due to the lockdown, and in the present time, the entire responsibility of reviving the economy depends on government spending. But the government has also failed to invest on a large scale.
The lack of demand in the market has added to the problem of unemployment. The average unemployment rate in November was above 6.5 per cent. This average rate is the highest in the last four decades. Inflation in November was 6.93 percent, while food inflation was 9.43 percent.
Today, the Indian economy is stuck in a terrible cycle of unemployment, poverty, inflation and inequality. This is not auspicious sign for the Indian economy. If new employment opportunities are not provided in the coming times, then the improvement in the Indian economy will be limited to only 1 percent of the people.
It is important that the government works in the new year with a new policy to generate new employment opportunities at a small level. Income generation can be done through employment in the market. As a result of job creation, demand will return to the market again and amidst the increasing demand, the wheel of investment and employment generation will start to spin.
Indian economy in 2019-20
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