Posted on June 6, 2024

Introduction

Witnessing a global arduous pandemic of COVID-19, India’s economy was not left out from encountering numerous challenges. With time; the virus affected virtually every aspect of life, and this had dire consequences since many businesses closed down due to the lockdown measures put in place. But there is the silver lining for India for despite the initial shockers India recovered very well in the following years. The following article explores potential factors that influenced and various measures adopted by the government to bring India out of the depths of economic downturn post pandemic.

This paper focuses on the first shot of the World Health Organization (WHO) declaring COVID-19 outbreak as a pandemic on January 30th 2020 and its effects on the global population.

Economic Contraction

India known as the jewel of Asia was also not spared when the pandemic hit its economy badly. The lockdowns and interactions limitations that the governments applied to reduce virus spread affected all fields of economic activity. The economic growth bottomed out,-GDP fell significantly, employment was under pressure with millions losing their jobs, especially in the vulnerable informal sector which makes up a significant portion of the Indian economy.

Government Response

To counter the crisis, the Indian government emerging several solutions with the aim of boosting the economy. Such measures included fiscal policies such as stimulus packages and monetary policies as well as relief measures to entities and persons. The objective was to offer an initial support that could help in creating the necessary conditions for a more enduring and progressive bounce back.

Several factors have determine the pace and rate of economic recovery, some of them are as follows;

Fiscal stimulus and policy reforms While there was some disagreement over the tactics of fiscal stimulus, there was still more disagreement with what they saw as the policy reforms sought by other countries.

Atmanirbhar Bharat Abhiyan

Among the key activities that formed the backbone of India’s Rebuilding strategy was the Atmanirbhar Bharat Abhiyan, Self-Reliant India Campaign. Introduced in May 2020, this stimulus package reviewed for reviving the economic growth through stimulus measures for close to 10 per cent of the GDP of India. The package was directed towards different domains such as farming, industries of medium, small and micro sizes, and core infrastructure.

Structural Reforms

Alongside the prompt intervention, the government also announced several structural adjustments that would tackle the root causes of the fiscal crisis and its consequences effectively. It owe to the political stability and the measures taken in the labor relations, farming, agrarian and in the business environment. These changes were aimed at improving efficiency, encouraging investors, and providing a stable environment for businesses.

Digital Transformation

According to KPMG’s analysis of responses from over 200 organizations across the country, the pandemic hastened digital adoption. As people had to reduce physical contacts due to COVID, they used other means to operate and interact in the economy, including digital ones. A simplified form of payments, online purchases, and even online doctor consultations were instrumental in maintaining the continuity of the economy during the lockdown phase.

UPI and Digital Payments

There are many examples, but the most notable one would be the case of Unified Payments Interface that emerged as very popular in India due to the Covid-19 situation. In addition to providing the convenience of continuity of operations, the majority of transactions became digital, which contributed to the engagement of additional people in legal financial operations. The transition towards a digital economy has therefore been instrumental in the phase towards recovery following the outbreak of the pandemic.

Revival of Key Sectors

Agriculture

The agricultural sector worth a large part of the economy continued its operations during the effects of the lockdowns hence cushioning the country from the worst of it. Monetary conditions also supported increase in food production through good monsoon rains and flexible policies from the government. In the same way, the cash transfers and subsides to farmers made a point to ensure demand from the rural sectors was not a problem.

Manufacturing and Exports

Subsectors that received good or a better recovery included the manufacturing industry especially pharmaceutical products and textiles. India’s role as one of the largest producers of generic drugs was further amplified when the entire world was placed on a health war. Further, the stimulus provided to several sectors and industries such as the Production Linked Incentive (PLI) scheme by the central government was designed to support domestic manufacturing as well as ramp up exports for the country’s economic revival.

VACCINATION: ITS IMPORTANCE DURING ECONOMIC RECOVERY

Vaccination Drive

Another essential weapon and cornerstone of the Indian response has been a successful vaccination drive. Bureaucracy began one of the biggest vaccination campaigns in the world; entire millions of people in India got vaccinated. Vaccination campaigns effectively put a stop to the virus’s transmission, enabling economic operations to reopen to an extended extent.

Impact on Consumer Confidence

As more people got vaccinated and hopefully death rates declined, consumer confidence slowly began to come back. This was especially the case in regard to an uplift in the spending on goods and services thereby boosting the demand. Consequent to the festive season, post-pandemic, people indulged more to avail the consumer goods that had a catalytic effect in the revival of the economy.

Never shall education and learning suffer through lack of enterprise and application of the pathway ahead of the following challenges;

Challenges and the Path Ahead

Ongoing Challenges

However, some difficulties have been observed even despite such an excellent improvement. The emergence of new variants of COVID-19 as well as inflation risks and global economic headwinds that currently remain hurdles to continued improvements. Finally, there is still the topic of the future consequences of the coronavirus on educational and employment opportunities.

Sustainable Growth Strategies

How India can sustain the growth they have achieved and it has been mentioned that there are several areas that must be addressed with utmost priority. These include:

Strengthening Healthcare Infrastructure: To avoid such scenarios, there is a need to invest in healthcare to be able to handle future foums in the best way possible.

Enhancing Education and Skill Development: Closing the digital divide and equal access to education: The case of.

Promoting Green Growth: Promoting sustainable development in terms of support of renewable energy resources and SPI Eco-Friendly policies.

Boosting Innovation and R&D: Fostering the introduction of new ideas and outcomes that permanently enhance economic development.

Conclusion

India’s experience of how it turned the corner from the COVID-19 induced economic slump to its interim phase is a story of India’s resourcefulness. The Indian economy has revived through government-sponsored mechanisms, digitalization drives and sector-specific support for improved growth. The positives emerging from the pandemic are that India, with the lessons learnt, has the wherewithal to cope with any future recessions and press on with its development path.

Categories: Business and Economy

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