Will the Indian economy revive in the next two years?
No one in India or even in the world would have thought that a deadly pathogen that is not even visible to naked eyes will change their lives once and for all. From February until now, the coronavirus named SARS-CoV 2, causing COVID 19 ailment, would kill one lakh in India and one million worldwide. But more than that it has destroyed the livelihood of millions and millions in India and more globally. And it has brought the already ailing Indian economy to its knees. The big question for economists and experts, and even ordinary people now is, will be the Indian economy revive in the next two years.
Frightening economic data concerning the Indian economy
For the first quarter of the financial year 2020-2021, the Indian GDP has nosedived by 23.95 % from April to June. It is the record low from the time of GDP concept introduced in India during the 1990s. Except for the agricultural sector produce, which saw a 3.8 % jump, all other sectors produce, which constitutes the GDP or gross domestic product values are in the negative. Even as per the CMIE or Center for Monitoring Indian Economy report, more than 12 crore people have already lost their jobs. In this scenario, the reviving of the Indian economy in two years depends on many factors.
Factors that could revive the Indian economy in two years
Only the Indian government has to provide the thrust to revive the economy in the next two years. For reasons unknown, it did not give cash support to the much needed Indians during the lockdown. Though the Rs. 20 lakh crore stimulus package, which amounts to 10 % of the Indian GDP of two trillion, was announced, it did not provide cash to the people to create the demand. It was more of bank loans and other ways to help the economy, which will take a long time to revive the economy. The US, which offered the same ten percent stimulus package of its 2.2 out of its 22 trillion USD economy, most American families got up to 3,200 USD. While converting it into Indian money it is nearly 2.5 lakh rupees. Similarly, the European Union and the UK put cash in the suffering people's hands to lift their economies by creating demand. But that did not happen in India and hence will be one of the significant factors for the economy to revive shortly.
Informal sector the most affected in India
The severe lockdown from March 25 to May 17 crippled millions of people in the informal sector, and it will take a lot of time to revive this sector.
MSMEs got some reprieve from the banks.
Out of the 20 lakh crore stimulus package, three lakh crores were earmarked for MSMEs to get loans from banks. Those who were able to get the loans would benefit significantly and contribute to the reviving of the economy in the long and short term.
Overall the picture looks grim for India, even with a slight recovery in September. Only the second quarter's GDP announcement from July to September, expected at the end of this month, will be an indicator of reviving the Indian economy in the next two years.