Ever since the first outbreak of corona virus (covid19) in Wuhan, China, the world has changed in more ways than one. Apart from the devastating effects of the pandemic, the death toll and struggling healthcare systems, the virus has left the economies world-wide staggering and even drowning in many parts of the world.
While some of the effects of Covid on the economy are short term, many can have lasting impacts. The lockdowns have hugely impacted the supply-chain management and sent the GDP and import-export cycle plummeting. There are three major areas of impact for Indian businesses which are linkages, supply chain and macroeconomic factors. This is indeed the worst recession since the Great Depression in the 1930s.
Although the majorly affected sectors include travel and tourism, logistics, auto, metals, drugs and pharmaceuticals and retail, among others, education as we know it, has completely changed and is impacted too.
Here’s a brief look at how some major industries have been affected due to the pandemic:
Education and E-learning–While the world that we live in has been evolving with time and technology, a few things have always been primarily ‘old school’, pun intended. Education and the way it’s imparted has always relied mostly on the traditional methods of classroom learning and teaching albeit with a comfortable integration of technology where and when required.
An integral approach was the most preferred, but the devastating effects of the pandemic has left educational institutions and educators with an immediate need to step up and change the way education is delivered to the students. The imperative nature of quality of education is something no one can compromise on and educational institutions in our country have seamlessly transitioned into e-learning and online teaching with the unanimous goal of students’ progress and uninterrupted learning.
It would not be an exaggeration if one were to say that we embarked on e-learning within a very short time. The efforts of the educators who adapted to technology, video lessons and live classes online cannot be understated. With limited resources but enough passion, educators across the world have been striving hard and will continue to do to deliver quality lessons and education.
Aviation and Tourism – One of the biggest hit industries, this sector has a high probability of suffering most from the recession without the direct intervention from the government. Since people are unlikely to travel for leisure for months to come, it will impact the inflow of tourists in all the countries drastically reducing the money flow in this sector.
Restaurant services – The National Restaurant Association of India (NRAI) which represent the majority of Indian restaurants had advised its members to shut down their dine-in services when the lockdown began which majorly impacted the dine-ins, pubs, cafes and also food delivery platforms such as Swiggy and Zomato which faced drop of 60% in revenue.
Raw materials and Electronic parts – Nearly 55% of electronics imported by India originate from China. These imports have dropped to 40% due to the pandemic and hence Indian government came up with the promotion of Atmanirbhar or indigenous production in a bid to reduce dependency. The lockdown has also resulted in reduced exports of raw materials like organic chemicals, cotton, mineral fuels resulting in substantial trade deficit for India.
Pharmaceutical Industry – With a major percentage of Active Pharmaceutical Ingredients (API) having to be imported from China, the economic toll on this industry is of major concern. With Covid spreading rapidly, the demand for medication has become primary and a major reduction in import of APIs adversely affects the manufacturing of drugs which will inevitably lead to a surge in drug prices.
Auto Sector – Due to falling demands, income levels and global recession, the manufacturing the auto parts and automobiles have taken a major hit. With continuing lockdown, a downward slide of this sector is expected.
Textiles Industry – Due to the halting of operation of textile factories in China, the export of raw materials such as cotton, other fabric, yarn from India has been majorly affected. The raw material unavailability, depletion in work force and working capital constraints has resulted in reduced demands and purchasing capacities.
IT industry – The dependence of the IT sector on many of the above-mentioned sectors such as manufacturing, retail, hospitality, communication etc. has resulted in major impacts on purchasing ability and investing patterns on IT services. This has impacted the requirement of additional work-force and inflow of revenue in this sector.
Silver Lining –
As we tread through this difficult period, each industry is striving to sustain and deliver. At REVA University, our goal has always been quality of education and the progress of our students. In a situation where classroom learning is rendered impossible, our faculty has been working tirelessly in bringing quality education to students by integrating the state-of-the-art technology in the learning and teaching process. We have also been focusing on the Virtual counseling sessions for parents and students and addressing their concerns.
An excerpt from the Chancellor’s Blog:
Time again for us to rethink and revisit our education system as we face the unprecedented disruption caused by the COVID-19 pandemic. As I keep saying our youth have been the most affected and higher education has been impacted in so many ways. REVA has no doubt aligned to online teaching and support and ensured learning was engaging; however, the greater challenge is yet to come. As the lockdown gets lifted in a phased manner, the onus of running education institutions and ensuring safety and security of students will reach an unprecedented high. This transition time will need all our synergies towards revisiting our value proposition and ensuring that we have the right strategies to deliver what we mean.
Read more here: https://www.reva.edu.in/cblogs/time-to-revisit
We hope as the economic activity resumes, the situation will get better gradually. It may take some time to normalise, as consumer behaviour, shopping and spending pattern will change when the social distancingnorms get a relaxation under the vigilance & supervision of the administration.
In the World Economic Outlook report for 2020, *the IMF mentions that firms may start hiring more people and expanding their payroll only slowly, as they may not be clear about the demand for their output.
Therefore, along with clear and effective communication, broad monetary and fiscal stimuli will be required to be coordinated on an international scale for maximum impact, and, “would be most effective to boost spending in the recovery phase.”
While the nation is fighting hard against Covid and the health risks, the economic packages and the measures in pipeline to revive the economy and the most affected sectors are the hopes that we thrive on to crawl out of this major crisis that we are all in.
*Source: https://indianexpress.com/article/explained/explained-how-has-covid-19-affected-the-global-economy-6410494/
