InternationalJournalofBusinessandGeneral Management(IJBGM)
ISSN(P):2319–2267;ISSN(E):2319–2275
Vol.11,Issue2,Jul–Dec2022;25–32 ©IASET
InternationalJournalofBusinessandGeneral Management(IJBGM)
ISSN(P):2319–2267;ISSN(E):2319–2275
Vol.11,Issue2,Jul–Dec2022;25–32 ©IASET
InthispaperresearchhasbeenmadetostudytheimpactofCovid19onworldeconomyandIndia.GDPgrowthrateof countrieshaslargelyaffected.Globaleconomicprospects2020,emphasisontheimmediateandnear-neartermoutlook fortheimpactoftheCovid19andgrowthoftheeconomiesworldwide.Accordingtothereportthattherewillbethe declineof5.2%inglobalGDPin2020.Theworldeconomyisgoingtofacethedeepestglobalrecessionwhichwill directlyaffecttheIndianEconomy.WeallknowthatIndianeconomyisinterlinkingwithworldforforeigntrade. ThereforeslowdownwillalsoaffectvarioussectorofIndianeconomy.Beingadevelopingcountry,notonlyexternal,but alsointernalchallengesaregrowingandcreatinghurdleinthegrowthofthenation.
ThereforethispaperhighlightsthechallengesandimpactofCovid19inIndiaaswellasworldeconomy.
KEYWORDS:CORONA,GDPGrowthRate,UnemploymentRate,RegressionAnalysis,Correlation,WorldEconomy
Received:23Aug2022|Revised:02Sep2022|Accepted:07Sep2022
DuetothisPandemictheworldeconomyhaschanged.ItstartedfromChinaandhadspreadtonearly200countries Worldwide.Sincethereisnovaccineavailabletocounterthespreadofvirus,manycountriesareworkingoverittoinvent thevaccinetosavethisworld,intillthentheonlysolutionavailabletoholditsspreadisfollowingprecautionslikesocial distancing,wearingmaskanduseofsanitizersetc.Thesocialdistancinghasresultedintocompletegloballockdownand thuscompleteshutdownofeconomicactivitiesexceptindispensablerequirements.Thispandemichasnotonlyaffected humanlifebutalsovariousissueslikesocial,political,environmental,religiousetcperspectives.
Afterimplicationofglobalization,oureconomyisdependentoninternationaltradeandourforeignpolicy.With thiscurrentsituationwecandistinguishtheglobaleconomybetweenpre-Covidandpost-Covidperiod.Andthedetestation againstchinamayresultinserioustradeissuesandcanturnintoglobalfinancialcrises.
SomeNegativeImpactsofLockdownonEconomy
Estimateenvisionsa5.2percentcontractioninglobalGDPin2020,usingmarketexchangerateweightsthedeepest globalrecessionindecades,despitetheextraordinaryeffortsofgovernmentstocounterthedeclinewithfiscaland monetarypolicysupport.Manyotherissueslike:
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Completedisturbanceofglobalsupplychains.
Lowerdemandfromconsumptionside.
Unemploymentnearly26millionpeoplelostjobsin
Globalgrowthin2020tofallto-3%(WorldeconomicoutlookAprilreport).IMFprojectedIndia'sgrowthtofall to1.2%in2020.
CumulativelosstoglobalGDPover2020&2021willbearound9trilliondollars.
MSMEsectorisfacingproblemwhichprovidesemploymentinIndia.
Ituncleartherepaymentofloans.
Theexpenditureonhealthcaremayresultinchangesofbudgetestimates.
Secondaryandtertiaryeconomicactivitiesarerelativelymoreimpacted.
Aviationsectorisalsobadlyaffected.
Followingattemptshavebeenmadeto:
TounderstandthepreCovidandpostCovidsituations.
ToanalyzetheimpactofcoronaonGDPoftheworldandalsoemployments.
TomeasurethecorrelationbetweenCovidcasesandGDPandunemploymentrateofthecountries.
Hypotheses:nullhypotheses:thereishighpositivecorrelationbetweencoronacasesandGDP.
Tostudythispapersecondarymethodhasbeenused.Differentsiteslikewww.economictimes.com,www.indiatoday.com, www.moneycontrol.com,www.IMF.comandreportsofIMF,WHO,GOIetc.,newspaperreportandmanymore.Totest thehypothesesregressionmodelisusedthroughSPSSsoftware.Diagrams,chartsandtablesareformedusingExcel spreadsheets.
2.WORLDECONOMY:PREANDPOSTPANDEMIC
Inthissegment,thehighlightsaregiveninrelationtotheGDPgrowthratebeforethispandemicandexpectedgrowthrate afterthispandemic.
Herethecomparisonhasbeenmadeusingdataofdifferentcountriesintheworld.Here,youcanseethatworld GDPgrowthratestoodat3.6%in2018and3.0%in2019whiletheexpectedrateofgrowthinGDPin2020isonly0.1% andby2021itwillbeonly0.2%.thisindicateshowpostcovid-19goingtoaffectworldeconomyifwearegoingto comparethelargesteconomyoftheworldlikeUSA,EuropeanUnion,Britain,thesituationcanbeseenherethattheseall countrieswerehavinggoodGDPgrowthratein2018and19theirgrowthhasbeendeclinedandifwetalkabout2020, theyareshowingthenegativegrowthrateintermsofGDPwhiletheretheyallareexpectedtogrowatabout4to6%by 2021.IfwetalkedaboutIndiaincomparisonofothercountryweareatabetterplacebecauseourGDPgrowthratein
ImpactFactor(JCC):7.4543
NAASRating3.51
2018was6.8%andin2019at6.1andwearenotstillhavinganynegativeimpactofitwearehaving1.9expectedGDP growthratein2020andby2021,weareassumingthatwewillbeat7.4%ofGDP.ComparingChinawewillbebetterbut restChinawillgrowatfasterrate.Sothisishowwecancompareheretheworldeconomyandthelargesteconomyofthe worldwithIndianeconomyandtheirtargetedGDPgrowthby2021andwecanfindherethatIndiaisabetterposition comparedtohighlydevelopedcountries.
RegressionAnalysis
FollowingresultofcorrelationanddependencybetweenCoronacasesandGDPgrowthhasbeendrawnusingdataofMay andJune2020.ForthisregressionandcorrelationtoolsareusedusingSPSSsoftware.Equationisformed:
Hereconstantvalueisusedtoformequation.Itimpliesthatifcoronacasesincreasesby1unit,GDPdecreasesby 1.85units.Itshowsthatcoronaspreadisgivingnegativeimpactoneconomiesoftheworld.Thiscanalsobeanalyzedwith Tvalueofthisresult.Thechosenregressionmodelforperiodhaveagoodfit.Thusthesignificanceofthemodelsare testedbyusingTvalueintable.Itismeasuredat5%significantlevelforthisTvalueiscomparedwiththevalueof5% confidencelevelifitisgreaterthan2.086thanrelationissignificantandifitislessthan2.086thanitisinsignificant.Here coefficientvaluesofdependentandindependentvariablesareindicatedbybetavaluesintable.Andwefindthattvalueis 481whichmeans,dependentandindependentvariableareinsignificantlyrelatedbecauseTvalueislessthan2.086and constantTvalueisfoundnegative.WhichmeansincreaseincoronacasesmayshownegativeeffectonGDPofcountries.
ThecorrelationshowshereusingBetavalue,whichisfound.168.Itindicatesthatthereislowpositivecorrelation betweencoronacasesandgrowthofGDP.Thushereanullhypothesishasbeenrejectedandalternativehypothesisis accepted.ItindicatesthatwithincreaseincoronacasescountiesGDPgrowthaffectednegativelybutlessbecausedifferent countrieshavedifferentgrowthandrateofcoronacases.
Itshowsthatcoronaspreadisgivingpositiveimpactoneconomiesoftheworldintermsofunemployment.This canalsobeanalyzedwithTvalueofthisresult.Herecoefficientvaluesofdependentandindependentvariablesare indicatedbybetavaluesintable.Andwefindthattvalueis.434whichmeans,dependentandindependentvariableare insignificantlyrelatedbecauseTvalueislessthan2.086.Whichmeansincreaseincoronacasesmaycauseincreasein unemploymentrates.
Correlationfoundhereismoderatepositive,indicatesthateconomiesarefacingunemploymentduetothis pandemic.
InthegivenFigurebelowitcanbeanalyzedthatin2019theglobaleconomyhas2.9%GDPgrowthrateand advancedcountriesweremaintainedin1.7%ofGDPgrowthwhiledevelopingcountriesaremaintaining3.7%.GDP growthreachingto2020whenwearefacingthiscoronapandemictheglobaleconomicfacednegativeGDPgrowththatis 4.9%eventheadvanceeconomicsface8.0%whiledevelopingcountryface3.0%andtheprojectionfor2021onthe basisofpresentsituationistakenastheincrementinglobaleconomymeansitwillbeat5.4%,advancedeconomieswill
have4.8anddevelopingeconomieswillbeat5.9%GDPgrowth.overallwecanunderstandthatcomparedtoadvanced economiesdevelopmenteconomiesarenotfacingthatmuchseriousproblemliketheirGDPgrowthhasdeclinedlower thantheadvanceeconomyGDPgrowthratein2020andwhenwearetalkingaboutrecoveryandprojectionfor2021,there alsodevelopingcountryeconomyGDPisgrowingfasterthantheadvancedeconomiesintheworldandoverallglobal economywillboostupandrecoversoon.Sowecanhopethatinnearfutureby2021oureconomywillberecoveredas wellastheworldeconomywillberecoveredandwewillgetbacktoworkplaces,wewillgetbacktoOuremployment,we willgetbacktoourGDPgrowthrateandoverallwewillhavegoodscenariointhefuture.Solet'shopeforthepositive andhavegoodeconomyinfuture.
NowinthissegmentIndianscenariowillbediscussedonthebasisofwhich,therealpictureofIndianeconomyduring lockdownorduetocoronawillbediscussed.talkingaboutIndianscenariowecanseethatIndianGDPgrowthonthebasis ofquarterlyrecordwasalsoverydifferent.FromOctobertoDecember2019theGDPgrowthratewasjustonepoint20% asweallknowthatIndiaisnowadayhavingvariousnewpoliciesimplementationduetowhichithasaffectedourGDP growthwiththenewyearfromJanuarytoMarch2020,wecanseethatGDPgrowthratehasincreasedto5%butwhenthe pandemicknockedourgate,whenthispandemicenterintoahousefromApriltoJune2020.ThisstatesthatIndia'sGDP growthhasdeclinedandshowsnegativeaffectitmeansweareabletodosomethingbetterbutduetoCovid19ourgrowth ratehasdeclineddrasticallywhichaffectedourmajorsectorsofeconomy,manufacturing,laboursector,servicesectorand manymore.weweretargetingfor5%GDPratebutexperiencednegativegrowthwhichisnotagoodsignofoureconomy becauseweareinthecategoryofdevelopingeconomywherewehavetogowithvarioussteps,varioussolutionsand varioussetbackalso.Withthepresentscenario,itcanbesaidthatthispandemichasmadeus10yearsbackeconomyfor whichweneedastrongsupportoffinancialmonetaryandfiscalpolicieswhichcanboostoureconomyandcanboostour participationinworldeconomyaswell
OnthebasisofaboveresearchitcanbeconcludedthatnotonlyIndiabuttheworldisfacingtheseriousproblemof economicslowdownaswellastheissueofworkforceparticipationandunemploymentintheeconomicfactorswhichare goingtoaffectinadrasticfacetotheoverallGDPgrowthofworldeconomyaccordingtotheresearchthewehavefound thatwithincreaseincoronaviruscasestherehasbeenanegativeimpactonGDPgrowthofworldwideaswellasinIndia butwhenwearetalkingaboutthegrowthinnegativetermitcanalsoberealisedthatthenegativegrowthwillnotbe remainforlongtimebecausedifferentcountrieshasdifferentwaytohealuptheirsituationforthisreasonthecoronavirus Azharfounddifferentindifferentcountriesbecauseofwastetheirnegativegrowthisnotsomuchaccordingtothe developedordevelopingcountriesforthemorewhenweresearchusingregressionmodelincoronacasesand unemploymentitisfoundthatthereispositiverelationbetweentheincreasingcoronacasesandtherateofunemployment asheonlythataswellascoronacaseswillincreaseinanycountrytherateofunemploymentwillalsoincreaseandinthe worldcauseweareherecomparingworldwiththedifferentscenarioofcasestheunemploymentratehasdifferentscenario butitisfoundmoderatebecausetheeconomyofdifferentcountrieshavedifferentsolution
UnemploymentwasreallyhighinthemonthofAprilbutwhenwereachestoMayandJunewhenthecountries areplanningandengagethemselvestocontrol20diseaseifithasrealisethatwiththeincreaseincoronacaseson employmenthasnotbeeneffectedatthatlevelbecauseofwhichwecanseethatnowadayspeoplearenotasmuchand employedasitwasinmonthofApril.
WiththeprojectionandestimateofIMFandWorldeconomicOutlookithasbeenalsorealisethatourglobal economyisgoingtorecoversoonespeciallythedevelopingcountrieswillrecoverfasterthanthedevelopedcountriesas weallknowthedevelopingcountriesarealwaysfacingchallengesandtrytomakethemselvessurviveinallkindof situationforthismadethisreasonwecansaythatdevelopingcountrywillgrowmorefasterthanthedevelopedcountryin nearfutureby2021globaleconomywillbecoveratfastestrateandwillbeabletoprovidebetteremploymenttotheworld workforce
TalkingaboutIndianscenariowehavefoundthatrightIndianactorshasbeenlargelyaffectedduetocoronavirus todayinourcountrybutwehavealsorealisethatweareinastateofrecoveryaswellandwearetargetingtoprovidemore andbetteremploymentopportunitytothepeopleandtryingtogrowatfasterrageintheworldeconomyandtorecoverthe situationtoprovidebettercontributioninworldeconomyGDPgrowth.
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