Impact of Coronavirus: Opportunities for India

We are living in unprecedented times and definitely, as a global health challenge, coronavirus is strengthening its grip. Therefore, do we hope for the best or prepare for the worst. Actually, both. But, paralysing phobia can never be helpful. As a nation, we are giving a befitting health system response. Everybody is worried about the impact of the virus on the globe in different forms. Already more than two lakh people are suffering worldwide and more than 10,000 have lost their lives. It is expected that the cases will spread even more in the coming few days. The health impact is very much visible in the form of the number of infected persons but the extent of its overall economic effects is still not very clear.

It is expected that Novel Coronavirus (COVID-19) will largely have a negative impact on the world economy. The stock markets in all the affected countries are falling and industries are not getting raw material. Many companies are cutting down production. Because of lockdown, the demand is also less. Therefore, the growth of the economy of many countries in the world will contract. UNCTAD has warned a slowdown of global growth to under two per cent, which is equal to one trillion of the world economy (WEF).  According to a poll, there will be a fall in the GDP growth of China from three to four percent. The similar negative impacts of fall in economic activities are estimated in countries such as Italy, Iran and other countries where coronavirus has become a pandemic.

Although, when we look at our stock markets, it is generally fear we can smell. This article aims at providing some breather for the people preparing for the worse, it gives some hope.

Data Source: https://www.worldometers.info/coronavirus/#countries

Being the second highest populated country in the world, India has largely avoided the scare as the total number of cases per million populations, is least. Almost all countries are suffering from the slowdown in economic activities. In India, because of less impact of coronavirus and the high marginal propensity to consume, there are very fewer chances of the persistent drop in economic activities. The present downturn in the market is only based on negative sentiments due to coronavirus and global slump. The markets in India should bounce back sharply while in some other countries it may take a longer period and the recovery phase may be much elongated.

Among all these ups and downs in the world economy, there are some opportunities for India on the economic front. It is expected that due to outbreak of Coronavirus in China, many foreign investors may shift investments in India to diversify their operations. There are chances that India will get more FDI in the near future. That will give a robust growth to ‘Make in India’ campaign. Indian present government also has a strong political will for the same. Huge population base, rural demand and availability of skilled and cheap labor and inflow of huge FDI will give impetus to the economy. It is a chance for India to increase the export of essential drugs and other materials as a substitute of China.

Among all these prospects, it is important to take some strict steps to prevent the outbreak of coronavirus on a large scale.

Stay healthy. Stay Safe. Be optimistic, it’s not the end. Perhaps, a new beginning.

About the author

Dr Sumesh Kumar is an Assistant Professor of Economics at International Institute of Health Management Research - IIHMR, Delhi. He is a PhD scholar in Economics and Management from Swami Vivekanand School

Note: The views expressed in this article are solely author’s own and do not reflect/represent those of Shiksha