COVID-19 and Future of Indian Economy.

COVID-19 pandemic has carved difficult economic hardships for the Indian economy. Rating agencies, World Bank, ADB all have predicted 1 to 1.5 percent growth for India’s GDP in coming quarter and for FY 2021. Economists have been ruminating about after effects of the pandemic in Indian economy. Stock markets are going through a turmoil in these strange times. Indices hitting three year low’s and bouncing back to previous positions and continuing this cycle for weeks have left analysts bewildered. Economists and financial analysts, none of them seems to have a grip over the current situation.

Previous RBI governor has suggested Indian ministry to form up a radical team to tackle this situation, without bounding to any inclination to political parties. The suggestion came up to the table when economists started to fear about things going south. The pandemic has left business at a stand still, both corporations and small businesses. Production and distribution has halted which has affected both state governments and central government in generating revenue. Corporations have asked the regulator to to delay the redemption of bonds and debentures which are about to mature in the coming week. But the request was declined, stating that company’s obligation to public must be full filled at any cause. In this scenario the corporations are likely to invoke “force-majeure ”, which would ascribe to delaying payments to banks and other creditors. If invoked, it can put banks and even the government at staggering situations. If “force-majeure” is invoked and is accompanied by recession, it can be detrimental for banks and financial institutions. Such an economic crisis can pull back India’s growth by another 21 years.

All these are facts about the pandemic and its after effects, bur I strongly believe in Ratan Tata’s words about this current scenario. “I don’t know about the forecasts of analysts and economist, but I know people working in harmony to achieve a goal can transcend any economical crisis and thrive forward”