Covid-19 Second Wave: Economic Impact Not Trivial But May Be Less Enduring

Covid-19 Second Wave :- After the devastation caused by first wave in 2020, the recent spike in Coronavirus cases in April 2021 is scaring the nation. According to Government, Coronavirus is spreading faster in the country compared to last year. On April 6, addressing a media conference, Dr VK Paul, Member-Health, Niti Aayog said, “The impact of the pandemic has increased in the country. Warnings were given that the situation should not be taken for granted. The situation of the pandemic has worsened and the speed of increasing COVID-19 cases is higher than last time.” Given the importance of this GD Topic, MBAUniverse.com presents a complete update on COVID 19. In addition to GD Round, this is also appearing in personal interview round. In many IIMs interviews, questions are being asked on impact of COVID 19 wave 2 on Indian economy and related aspects. So be ready!

Covid-19 Second Wave

Important Statistics

1. The daily rise in COVID-19 cases in India crossed the grim milestone of one-lakh from 20,000 infections in just 25 days, unlike last year when it took 76 days for daily cases to reach the then peak of 97,894 on September 17, reflecting the speed at which the virus is spreading.
2. As on day 81 of the vaccination drive on 6 April, a total of 33,37,601 vaccine doses were given.
3. India surpasses US to become the fastest Covid-19 vaccinating country in world

Cases overview in India and the World as on April 6
Here is the latest date on Covid 19 cases from John Hopkins University USA.

India

Total cases	Recovered	Deaths
12.8M 1,28,00,000	11.8M 1,18,00,000	166K 1,66,000

Worldwide​

Total cases	Recovered	Deaths
132M 13,20,00,000	75.2M 7,52,00,000	2.87M 28,70,000

Economic Impact of COVID 19 on India

Indeed, in 2020, the economic impact of the coronavirus pandemic in India has been disruptive. India’s growth in the fourth quarter of the fiscal year 2020 went down to 3.1% according to the Ministry of Statistics. The Chief Economic Adviser to the Government of India said that this drop is mainly due to the coronavirus pandemic effect on the Indian economy. Notably India had also been witnessing a pre-pandemic slowdown. So this was a double whammy.

The World Bank and rating agencies had initially revised India’s growth for FY2021 with the lowest figures India has seen in three decades since India’s economic liberalization in the 1990s. However, after the announcement of the economic package in mid-May, India’s GDP estimates were downgraded even more to negative figures, signalling a deep recession. Of course, it was not just India but the ratings of over 30 countries have been downgraded during this period. On 26 May, CRISIL announced that this will perhaps be India’s worst recession since independence. On 1 September 2020, the Ministry of Statistics released the GDP figures for Q1 (April to June) FY21, which showed a contraction of 24% as compared to the same period the year before. According to Nomura India Business Resumption Index economic activity fell from 82.9 on 22 March to 44.7 on 26 April.

However, by September 2020, economic activity was nearly back to pre-lockdown. During this period, unemployment rose from 6.7% on 15 March to 26% on 19 April and then back down to pre-lockdown levels by mid-June. During the lockdown, an estimated 14 crore (140 million) people lost employment while salaries were cut for many others. More than 45% of households across the nation have reported an income drop as compared to the previous year.

Supply chains have been put under stress with the lockdown restrictions in place.Those in the informal sectors and daily wage groups have been at the most risk. A large number of farmers around the country who grow perishables also faced uncertainty. Vendor of greens, essential supply chains and logistics. Last year, Stock Markets in India posted their worst loses in history on 23 March 2020. As economy recovered in 2021, stock market rose sharply to hit all time highs.

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What the Indian government is doing:

• India’s vaccination program began on 16th Jan 2021. The vaccines – ‘Covaxin’ and ‘Covishield’ are being given. At first, vaccines are given to frontline workers – healthcare professionals, sanitation workers and municipal workers. And then, people after 60 years are given vaccination. Now, people aged above 45 years are receiving the vaccine.
• The Indian government has imposed strict rules on wearing masks.
• Russia’s vaccine ‘Sputnik V‘ is being imported to compensate for the vaccine shortages.
• To fight against the second wave, the Indian government is locking the ‘micro-containment zones‘ instead of opting for the complete lockdown. This decision is taken to prevent further job losses.

Economic Impact: Lesser But Not Trivial

High-frequency indicators are suggesting some impact to the economy already but the damage is not as extensive as during the first wave. “The level of stringency of lockdowns, even in states where they have been announced, is lesser than what we saw in the nationwide lockdown last year.” As such, while mobility has fallen sharply, other indicators are shown

Vaccines vs mutants’

Economist D.K. Srivastava cautioned that failure to rein in the surge in cases soon would worsen the adverse impact on the economy.

“The longer the second wave lasts, the more severe would be the adverse impact on the economy ,” said Mr Srivastava, chief policy advisor at EY India. “There would be a race between the pace of COVID vaccination vis-à-vis the speed at which COVID-19 including its new mutants spread,”

Overall, we can say that while COVID 19 presents a big challenge for India, there are two big positives for India:

1. Structural Reforms taken by Government of India in 2020 and in 2021 Union Budget to make India economy more competitive
2. Rapid Vaccination Drive in India. On April 6, India surpasses US to become the fastest Covid-19 vaccinating country in world

Also Read:- How To Prepare For Group Discussion Tips

1. What Group Discussion Skills Required
2. How to Start a GD
3. What Skills Are Judged In GD?
4. How to Enter a GD in the Middle of the Discussion
5. How to prepare for Group Discussion
6. Read Daily Current Affairs