KARE COVID-19 Response Bulletin 40 – Economy edition
Kumaraguru Action for Relief and Empowerment (KARE), was founded in Nov, 2015 during the Chennai floods. KARE supports the victims of natural disasters such as floods, cyclone and other calamities and has supported during Kerala floods & Gaja Cyclone. This is a volunteer movement of Kumaraguru Institutions where many join hands when the need arises.
KARE COVID 19 Response Bulletin is an effort by a group of Kumaraguru alumni, students & informed citizens alike to clear the clutter around COVID 19 by providing informative, insightful news, articles & data around the world under various tags such as Research, Technology, Education, Economy & Insights with a short summary for each.
COVID19 Basic Info & Previous Bulletin Link: tinyurl.com/blog-KARE
India vs the World – Global fight against a virus
|COVID-19||Active Cases||Recovered||Casualties |
The above graph depicts the daily confirmed COVID-19 cases as of May 04, 2021. Although the number of cases across the country are still high, in several states including Maharashtra, Uttar Pradesh and Kerala, the cases are stabilizing. |Prof. Shamika Ravi
India’s COVID-19 crisis on the verge of derailing the global economy
With the second wave of COVID-19 on the rise, it is evident that the pandemic has resulted in a humanitarian crisis. India is a significant contributor to the world’s economic growth and 2021 was expected to be a year with a great rebound for the Indian and the world economy. However, this has now become doubtful with the increasing number of COVID-19 cases across the country. International restrictions have greatly impacted India, creating a dampening effect on the businesses that depend on the airline, and airports. The global exportation of drugs and medicines have also been disrupted due to the pandemic which has paved the way for all sorts of consequences in the healthcare sector. India also provides support to the UK and US by rendering services, especially in the health and financial sector. With these services in jeopardy now, the global economy is heavily impacted. |Business Standard
Factory orders, production rise at slowest rates in 8 months in April
India’s manufacturing sector activity was largely flat in April due to the COVID-19 crisis. The Purchasing Managers’ Index (PMI) results for April showed a further slowdown in rates of growth for new orders and output, both of which eased to eight-month lows amid the intensification of the COVID-19 crisis. On the job front, although manufacturing employment continued to fall, the rate of contraction recorded in April was marginal and the weakest in the current 13-month sequence of job shedding. On the prices front, survey participants also signalled a steep increase in input costs, and upward revisions to selling prices. |The Hindu
Second Coronavirus wave leaves another 7 million people jobless in India
India’s unemployment rate rose to a four-month high of nearly 8% in April. Unemployment increased to 7.97% from 6.5% in March, with more than seven million jobs lost last month, according to data from Centre for Monitoring Indian Economy Pvt., a private research firm. The weak employment outlook is a risk for India’s chances of reaching double-digit economic growth this year. Many economists have already lowered their projections, while several are warning of possible reductions if provincial curbs are extended further. |Business Standard
COVID-19 second wave: Economic Impact less enduring but not trivial
The economic impact of the second wave of the Coronavirus will be ‘less enduring but not trivial’ according to Sajjid Chinoy of JP Morgan Stanley and Sonal Varma of Nomura. A contraction of 1.5% has been predicted — however these estimations are based on the second wave peaking in May. Even without the impact of the second wave on the economy, and ‘taking into account’ double digit growth, India would still fall 6% to 7% behind. The more lasting solution is to vaccinate as much of the population as possible. Vaccinations are poised to be 0.5% of the GDP, while the total budgeted fiscal deficit is placed at 10% of the GDP. A state specific response financially with support from the center is necessary to ensure that deficit levels don’t go beyond the permitted 4% for larger states. |Bloomberg Quint
Foreign investors bet on an economic rebound in India
Foreign investors bet that the current economic crisis of India will rebound as soon as the pandemic passes. The Indian rupee has been one of the worst performing heavyweight currencies this month. “The thing about India is that public deficits and debts are high, but it holds almost exclusively domestically and the country has a very strong record of growth,” says one of the S&P Global’s top sovereign analysts, Frank gill. Foreigners hold just 2 %of Indian government debt. The government has already eased stringent foreign ownership limits that has been a great obstacle for inclusion. |Economic Times
RBI Governor announces fiscal measures
Reserve Bank of India Governor Shaktikanta Das announced a set of fiscal measures on May 5, 2021, to help individuals, small businesses, and micro-finance institutions tide over the second wave of COVID-19 cases in the country. The measures include a second purchase of G-Sec (Government Securities) for Rs.35,000 Crore, On-tap liquidity of Rs.50,000 crore at a repo rate which is being opened till March 31, 2022, incentivising bank to extend swift credit to weak sectors, restructuring resolutions, and so on. Many states have introduced lockdowns and other COVID-19 induced restrictions, which could hurt the economy. |Money Control
As govt cuts GST, a look at duties on certain imported items
As India faces a shortage of medical-grade oxygen, hospital beds, and life-saving medicines like Remdesivir, there have been various calls in order to reduce the tax for these items. Some states even held an emergency meeting inorder to review GST applicable for medical equipment. It is reported that the medical – grade oxygen cylinders itself hold a GST of 12% making it complicated to use. Late last week, the Centre announced that the GST on oxygen concentrators for personal use would be slashed to 12 % from 28%. On May 3, these items were exempted from integrated GST (IGST) as well. |Money Control
The plunge into poverty
Economists warn depleting household savings and falling incomes will have an impact on domestic consumption, which accounts for almost 60% of GDP. Data showed April jobless rate increased to nearly 8% from 6.5% in March, with more than seven million exiting the workforce last month. As a result of all the turmoil that started last year, income inequality is deepening in India. About 230 million individuals slid below the national daily minimum wage threshold of 375 rupees during the pandemic. |Bloomberg
Service Sector Activities ease to a three month low
As India battles the second wave of COVID-19, the service sector in the country fell to a three month low. The Purchasing Managers Index (PMI) fell to 54 in April from 54.6 in March. This is the ‘steepest’ rise in overall expenses since December 2011. Travel restrictions continue to reduce international demands for Indian services, now at its 14th month since the onset of the pandemic. The composite PMI that measures services and manufacturing output has seen a fall from 56 to 55.4 from March to April. The RBI governor Shaktikanta Das has announced a priority lending of 50,000 crores for hospitals, oxygen suppliers and priority banks by March 2022. |The Hindu
Where can we get authentic information about Coronavirus?
KARE COVID-19 Response So Far
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63000+ Lives Impacted
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