Analysts reported that the world’s biggest lock-down, with most of the closed factories and businesses, halted flights and trains and restriction in traveling by cars, could have cost the Indian economy Rs 7-8 lakh crore during the 21-day time frame. Prime Minister Narendra Modi declared a nation-wide lock-down on 25 March, seeking to deter the dissemination of COVID-19. This contributed to the collapse of up to 70% of economic development, production, exports, and disposable consumption.
The operations were allowed only for critical products and services, such as essential daily needs, agriculture, manufacturing, energy, other financial and IT and public services. According to Center Institutional Analysis, the country again faces low one-digit growth potential in FY 2021 (April 2020 to March 2021) and notes that the pandemic arrived in an unacceptable moment for India whose economy displayed signs of recovery after audacious fiscal/monetary initiatives. “Nationwide complete lockdown is likely to shave off at least Rs 7-8 trillion,” it further added.
Transport, lodging, restaurants, and real estate are the areas most adversely affected. Throughout his address to the country on Tuesday morning, Prime Minister Modi would presumably outline the post-lockdown scenario.
In addition to disrupting the global economy, COVID-19’s rapid spread in several areas of India contributed to a partial shutdown from the beginning of March and an almost full shut down on 25 March.
The cumulative losses for truckers over the first 15 days during the lockout time were about Rs 35,200 crore, with an estimated Rs 2,200 loss per truck each day, according to all of India Motor Transport conference (AIMTC) Secretary-General Naveen Gupta.
“More than 90 percent of the about one crore trucks in the country are off roads during the lockdown as truckers with only essential commodities are on the move,” he said. “Even if the lockdown is lifted, it will take at least 2 to 3 months for truckers to limp to some normal scale as we apprehend consumption of non-essential items to remain hit on the account of lack of purchasing power.”
AIMTC is the mass of nearly 93 lakh transporters and truckers. National Real Estate Council-a real estate agency, puts Rs 1 lakh crore losses in the market. “I am scared to estimate what the losses would be. I think, a potential loss of maybe Rs 1 lakh crore on a conservative basis on an all India basis. It is a conservative figure. I cannot think of the upper end of the figure. Based on thumb rule, at least Rs 1 lakh crore,” said Niranjan Hiranandani, the president of the real estate business.
According to the Confederation of All Indian Traders, the casualties of a COVID-19 pandemic triggered by the country’s retail trade in the second half of March contributed to 30 billion USD.
In addition to concerns about the effects of an outbreak of COVID-19, many foreign agencies cut India’s FY21 economic growth forecast. On Sunday, the World Bank announced that India’s economy will expand by 1.5% to 2.8% in the fiscal year 2020-21, which began on April 1. This is the highest pace of development since the 1991 economic reforms.
The Economic Growth of India shrunk to 4% in the FY21, while S&P Global Ratings cut its GDP growth estimate for India further to 3.5% as against its previous decrease of 5.2%.
Fitch Ratings forecasts India’s rise at 2% although India’s FY21 forecast has been updated by India’s Ratings & Research at 3.6% from 5.5% previously.
In the 2020 calendar year, Moody’s Investors Service shrunk its forecast of GDP growth for India to 2.5%, from its prior forecast of 5.3%, claiming the coronavirus pandemic would trigger a global economy unparalleled shock.
According to Acuite Score, there is a scope to decrease GDP by 5-6 percent to April-June (2020-21 fiscal), with Q2 (July-September), too, predicted to show marginal growth in the best-case scenario.
In the second half of the financial year, it predicts that the general GDP growth would be between 2 and 3 percent. This takes into account a significant economic upturn. “We have cut our GDP estimates for FY21 from 5.2 percent to 3.1 percent and believe that too will be back-ended,” Centrum Institutional Research said.
