The second wave has caught India at its worst. This has hampered the healthcare structure and intensified the economic front’s acquisition planning, business uncertainty, and inefficient operations. These factors are expected to harm India’s working-class the most, especially low waged and migrant workers. 

But, with the recent announcement that all adults are eligible for a vaccine, employers across the country are hoping to vaccinate their workers and return to work rapidly. The vaccine economy relationship is going to shape the coming few months in India. 

The Indian Economy Lacks Immunity from Distress

The first wave of COVID-19 in India devastated the economy, but the rescue operations announced by the Indian government and the RBI, despite their shortcomings, soothed the blow. To control the damage to the economy, the government announced a series of emergency measures under the Atmanirbhar Bharat programme. The RBI also announced various actions to protect individuals and businesses during the crisis by extending loan moratoriums.

But this time, the relief effort will not help as the government is overwhelmed due to its lack of preparedness. The only option for the government to aid businesses, SMEs and MSMEs, while providing healthcare to citizens is to borrow more. But that will further exacerbate the worsening budget deficit.

Present Situation of Indian Economy

India faces a large decline in governmental revenues and growth of the financial gain because the coronavirus hits economic activity of the country as a full. Developing countries like India have a lot more fragile economic and social conditions and also the contemporary state of affairs can produce a lot of suffering for the unorganized sectors and migrant labour. A fall in capitalist sentiment impacts privatization plans, government and trade.

India is going to be one of the worst-affected among the world’s major economies even once the pandemic fades away. A global recession currently looks inevitable. However, how deep and long the downswings are depends on the success of precautions taken to stop the unfold of COVID-19, the results of governmental policies to alleviate liquidity issues in SMEs and to support families below money distress. It conjointly depends upon corporations’ reactions and hardening the economic activities again. And, above all, it depends on however long these lockdowns can last.

This economic uncertainty is unlikely to dissipate unless the COVID caseload begins to go down and disappear. Henceforth the first objective of government, in the slightest degree levels has to be the expanded relief; making sure the convenience of basic medical facilities and working towards a large boost of the vaccination programme.

Lockdown & Indian Economy

The Lockdown can have a major impact on the Indian economy principally on consumption that is the biggest part of GDP. Our country is facing a really difficult and horrendous time during this year in matters of finances. India needs to desperately realize some way to comfort the demand side shocks born by potential lockdowns and currently alternative containment lifestyle.

Small Businesses  & Local Lockdowns due to Second Wave of Covid-19 in India

In the wake of 2021 when we just thought things were starting to look up, the second wave of Coronavirus took over. On 12th April, India recorded a ruthless 169,000 covid infections surpassing the count in Brazil which was second in the list of worst affected countries. To gain a control of the situation in India, the states started imposing local lockdowns. The areas under lockdown or curfew are suffering heavily especially the small businesses. The main problem faced by the small businesses is access to markets during the pandemic where it can sell because people have gone inside cocoons to save themselves from the impending disaster. 

Many businesses have come up with creative ways to solve this problem but it doesn’t solve the major market’s problem of reachability to its customers. To revive the small businesses, the government also tried to help but it is less significant in India owing to the GDP per capita. Higher the GDP per person, higher is the level of measures taken to save the business as a percentage of the GDP. In a nutshell, the wealthier countries are more prudently helping the small businesses than third world countries or developing countries like India.

Economy slowdowns as Small businesses are stumbling

With the curfews and lockdowns in 2021 the state of small businesses has reached a new low as compared to that in 2020. Those in the manufacturing sector of small businesses have shown facing tougher struggles. A survey by data firm Dun & Bradstreet has shown 82% of businesses have undergone a crucially negative impact during the second wave of the pandemic. 

In Bihar, because of night curfew from 6pm to 6am, all shops and businesses need to be closed from 4pm onwards. In Uttarakhand, this time is even more lengthened to close the shops at 2pm. With these restrictions apart from curfew, the small businesses can hardly make a living leave aside the pleas for profit. While walking down the roads during this time of closing one can feel the terror of the second wave of the pandemic and the stark loss that most of the small businesses are suffering from due to early closure of shops and the local curfews and lockdowns. 

Another problem faced by the small businesses is productivity. In this grip of Covid-19, these businesses are failing to reach out to the production companies and lacking in productivity due to a lower number of commuters who are available to work. 

Uninterrupted home delivery will ensure the economy doesn’t crumble

The focus by all Governments including the Karnataka Government this time around has been to support the economy. Since the economy last year was severely impacted due to nationwide lockdowns, Governments want to prioritise businesses to ensure that it doesn’t crumble once again. Despite cases going through the roof and the situation being worse than it can ever be, the Government is trying hard to ensure that the lowest rungs of society are not impacted due to closures. 

Items covered under ‘ALL’ home deliveries.

The fact that all kinds of home deliveries are supported is tremendous since it will be simpler for consumers to get all their necessary goods delivered to their doorstep. Ordering from food delivery platforms like Swiggy and Zomato will be uninterrupted during the lockdown. 

The next most important item on the list of consumers is liquor. The Karnataka Government has already anticipated the importance of liquor supply which is why they have given the go-ahead for liquor shops and outlets to provide home deliveries. Liquor shops will also stay open for takeaways. 

E-commerce firms supplying all kinds of goods like clothing, electronics, groceries, medicines and food are being allowed to deliver goods. 

Restaurants Hotels, and Eateries will stay open and will operate their kitchens for takeaway/home delivery of food items. 

The GDP growth rate in April-September 2020 contracted by 15.7 per cent compared with a 4.8 per cent growth in the same period of 2019. In 2020, the state of millions of excluded migrant workers made it clear that the COVID induced lockdowns had the worst impact on the MSME sector and small business in India. That is why the government established the Atmanirhbar Package for aiding MSMEs and India’s vulnerable. But the scheme fell short of its objectives and widely focused on loan guarantees than actual cash relief.

With a Lockdown in View, 2021 Also Looks Bleak

In the second week of April, India’s business activity has started to drop dramatically, and the economic situation could deteriorate further as COVID cases are skyrocketing. The Nomura India Business Resumption Index, which tracks high-frequency economic indicators like financial mobility, is about 16 percentage points below the normal levels. 

Although India has not yet declared a national lockdown, severe national bottlenecks to curb the cases severely impact businesses, especially small, medium and micro-companies. Economic activities are getting affected across the country due to curbs imposed by states amid a surge in COVID-19 cases. 

The Nomura Care ranking has also reduced the estimated GDP growth value of the GDP for the 2021-22 fiscal year to 10.2% from the previous estimate of 10.9. As India has no choice but to tighten restrictions due to deaths and accidents, more businesses may be affected in the coming months. Economists indicate that the economic impact of the second wave could intensify in the next few weeks due to lower mobility. 

However, energy demand and occupancy rates remained essentially unchanged. Companies in the aviation, automotive, tourism, hospitality, restaurants and other sectors are likely to be subjected to new government restrictions to contain the disease. But one sure thing is that the Indian economy, and indeed India’s small businesses, cannot bear another nationwide lockdown.