Monday, August 17, 2020

Pandemic Situation: Indian Economy at halt!

We have witnessed a tough situation in this pandemic, 2020. Starting from total lockdown for days to trying to live a normal life in this strange situation of crashing economy, crashing lives, crashing livelihoods, and so on. Never had we seen a situation where, trains, flights and other public facilities were totally shut. Congested places like the metropolitan cities of India were totally vacant. Schools, workplaces and manufacturing plants are still not functioning at their fullest capacities. Though, we at NCU are doing everything to guide our students, be it guidance in education or to reduce the stress level in such situation. We are battling a worldwide pandemic, which even the most sophisticated, most advanced countries are finding hard to beat.

The lockdown is legitimized. The Covid-19 corona virus, which has developed exponentially, was slowed down in China with the assistance of comparable lockdowns. No big surprise large parts of Europe and the US have followed a similar model to stop the spread of infection. For this, our BA (H) Economics students have conducted study on this. Our syllabus includes all the latest topics including effect of corona virus on various economies. The following is the conclusion of the study conducted by our BA (H) Economics students.

After the great depression of 1930s where the global economy has faced a very critical situation is now facing the pandemic that has put all the economic activities at halt across the world. The precipitous deterioration in economic activities because of this lockdown is unanticipated in the history of India. The great economist Keynes gave the concept of “trade business cycle” after the great depression of 1930s. In which he explained that the four stage of trade cycle is considered to measure the growth rate and real GDP. IMF has predicted the GDP growth as 1.9% and this shows the most horrible growth performance of our country after the liberalisation policy of 1991 in the current financial year. The reason being corona virus which has frightened the entire economy. Though, IMF in its most recent publication of the World Economy Report has positioned India as the swiftest mounting economy in 2020.

In India, the impact on prognostic sectors of the economy is harsher than that observed in 2008 crises. The country is now facing multiple challenges in terms of finance, health, foreign trade and much more. The banks have boosted the excess cash flow because of the demand-side jolts which has arisen due to lock down and the uncertainties because of this sudden lockdown. The financial sector also suffered huge shocks including stock market, liquidity catastrophes, etc as the liquidity was drained out from the international market and huge changes were made in the monetary policy of the country. Companies which hinge on global trade suffered acute tension. The international economic production is on deterioration and anticipating a gigantic slump in the complete economic and financial system of the country. This pandemic has knocked the economy which examined the mark to make our economy of “USD $5 Trillion with 7% of GDP by the year 2024”.

According to the World Bank most recent valuation, India is expected to grow 1.5 percent to 2.8 percent. Also, according to the projection of IMF, India is estimated to have a GDP growth of 1.9 percent in the current year. However, to accomplish the target of “USD $5 Trillion economy”, Indian Economy should grow at 9% per annum for five years, which is extremely tough to achieve given the current circumstances.

Perhaps this emergency will make us take up enormous changes — as we may have minimal opportunities in any case. We last implemented major economic changes in 1991, when we had a colossal monetary emergency. The 2020 corona virus is another gigantic emergency, which may lead us to the changes we need in the economy.

At School of Management, The NorthCap University, we teach each and every topic connecting with the real world so that the students get deeper knowledge and hands on experience while studying. Our program objective is to face the VUCA (Volatility, Uncertainty, Complex and Ambiguity) environment through teaching pedagogy. And we are doing the same practically and the objective is being achieved at The NorthCap University.

Dr. Priyanka Banerji
Assistant Professor (Senior Scale)

The NorthCap University

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