The COVID-19 pandemic has pushed India into the first economic recession in its history. According to the Reserve Bank of India, the country’s economy shrank by 8.6% in the July-September quarter. This followed a record 23.8% contraction in the April-June quarter. Before the health crisis, India was the fastest-growing economy in the world, thanks to its youthful and entrepreneurial population. Prime Minister Narendra Modi had made efforts to eliminate India’s complicated bureaucracy to attract more international investment.
However, roughly 90% of India’s 500 million-strong workforce are working in informal sectors which leaves them without any safety nets. These people were suddenly confined to their homes for two months after the government implemented the nationwide lockdown in late March. Some experts agreed that the measures managed to slow down the spread of the virus. However, it left the majority of the country without earnings during this period.
According to some estimates, around 400 million Indians fell further into poverty during the nationwide lockdown. Small and medium enterprises were out of business as consumer spending crashed. The Indian government lifted some restrictions under the lockdown on June 1. However, some sectors, such as tourism and hospitality, were slow to resume operations.
The federal government has issued a series of fiscal packages, including a £17.5 billion ($235 million) stimulus for the nation’s poor in March and another £15.2 billion ($204 million) stimulus package last week. However, the distribution of the aid has been erratic. Millions of Indians are unable to claim the benefits as they lack proper documentation.
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Published on November 13, 2020 3:45 PM (GMT+8)Last Updated on November 13, 2020 3:45 PM (GMT+8)
