DMPQ-Write down the effect of COVID-19 on the economy of the country.

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Effects:

Negative:

  • All major industries getting affected such as Hospitality, tourism, Aviation will be directly impacted because of low demand.
  • Gig economy affected mostly and it will lead to loss of Jobs and unemployment rate will increase.
  • Export Industries will show loss in the forthcoming period due to reduction in the demand of export goods. Most Nations are closing their borders and unessential imports will get discouraged.
  • The financial institution having exposure to the stressed sectors will lead to increase in the amount of substandard assets. In the long run they can become NPA. Our NPA is already on higher scale 12% of the gross advance is still NPA.
  • Stock market take the most of the effect with SENSEX and NIFTY were highly Bearish.
  • The additional revival economic package will be burden on the exchequer and will increase our fiscal deficit and the interest burden.
  • Overall investment and demand will reduce and it will lead to reduction in the overall economic activity.
  • According to an estimate it will lead to 1-2% drop in the GDP growth rate. The situation is serious as our growth rate is already on decline. Currently our GDP growth rate is Just 5%.

 

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