Post Covid-19 Economic Status

 The Impact 

After the dramatic pause due to the impact of the coronavirus, economists have begun to wonder what shape would the recovery take place after the pandemic is over. And when would the rise if any stabilize or be at par with the pre-covid-19 level.  In spite of enthusiasm expressed by some planners, a V-shaped trajectory is nigh impossible taking into account the disruptive nature of the pandemic. 

The state of financial well-being and business stability is always expressed in figures and percentages in graphs and info graphs online. The methodology adopted in order to compute the economic status at any given time is standardized. But there are many if and buts that regulate the outcome.  At the present juncture, all cogs in the wheel have been badly disrupted. There seems to be no recourse to a stable environment that will fetch prosperity back to the people with states being shrouded by the dark clouds of death and destruction.     

The lowest figures stated by the World Bank and rating agencies are suggestive of a deep plunge due to the impact on the growth which was witnessing a downslide for the first time since liberalization in 1990. Growth figures projected for the fiscal year 2021 have come spiraling down indicating a deep recession. The negative growth rate is attributed to the pandemic and not surprisingly calls for economy booster packages.      

After a deep plunge downwards due to intense lockdown globally, there was a brief upward trajectory whence the first wave ended, and it seemed that this was the end of the travails. But this was not to be, for the second wave after a brief lull shook the Nation with complete surprise.  

The contraction of GDP in the year 2021 is as much as 40% which is not at all encouraging. This is a testing time for planners and the dispensation as to how it extracts the country out of the quagmire.  

The coronavirus is attacking humanity in waves, each being as uncertain as the first one. The second wave has struck with complete surprise causing an unimaginable loss in terms of humanity, as well as the economy. Though the period has been relatively short, the economic impact has not been as devastating as the death toll. But the scars are going to take a long to erase, and the uncertainty that prevails will definitely affect the economic recovery if we add the impact of the first wave now already exhausted. 

In order to comprehend the post-pandemic state we will have to consider many factors that currently govern our economy.  

India remains a third World mixed economy, even if we take into consideration a few strides of success we have made here and there. We are certainly yet to reach the top in order to be seen as a developed Nation.  

The first aspect that we are concerned about is the pandemic itself and how it will unfold further. Will it die down after the apocryphal third wave in a short time or will it be a prolonged tragedy pulling the country deeper into to chaos and economic downslide? No wonder the pandemic has been the worst disaster of the century.  

The impact has been cataclysmic, and we are still reeling under the human tragedy that has unfolded. The destruction has not been in material terms like in the World wars. But the deaths have certainly been more than them. Equally, the next worst impact heaped upon us has been the economic downturn which has affected all strata of society, all over the globe. Hardly few sectors have been left unscathed, but they too have suffered indirectly from the abrupt cessation of industrial activities all around. Both the manufacturing and the service sector have been performing badly. The reduction in employment and the salary cuts including that of the daily wage group and the informal sector have directly impacted the spending power of Indians which has reflected upon the manufacturing as well as the service sector.  Knee-jerk solutions have provided no succor in the current state. They have not made any positive impact on the situation albeit substantial relief has been provided to those below the poverty level as far as sustenance is concerned.  

More than forty percent of Indian households have reported an income drop during the ongoing lockdowns. More than fifty percent of businesses have reported a total closure or significant slow down this has impacted the country's 2.8 trillion economies such that only a quarter of it is functional. The supply chains have been put under severe stress with the agriculture sector being the worst sufferer during the lockdown.  

The business resumption index stands at the dismal figure of 44 much less than 89 which was the pre-pandemic figure. There is a lot of hesitancy as regards stability in this period and business operations have been significantly affected by the absence of contingency management within and at the National level since even when the virus struck in Wuhan none assumed that the emerging epidemic would turn into a pandemic. The spread has been universal and the significant slowdown due to frequent lockdowns has increased the suffrage of the people exaggerated by sickness, deaths, and unemployment as a result.   

There would be a significant improvement in the situation if the vaccination is successful or if the pandemic subsides completely on its own. India has the resilience and the necessary wherewithal to bounce back as a Nation and this applies to the economy as well. Will we see the daylight in the year 2022 or 2023 is a matter of conjecture?

Indian Hospitality Industry in Doldrums

Impact of Pandemic on Travel 

Unfortunately, the impact is global and has set a domino effect of sorts. Nowhere has been the impact of Covid 19 Pandemic so severe as in the case of our tourism sector especially as regards inbound travel in India. The forecast is that it will take as many as two years for the valuable foreign exchange earner to emerge from the shackles of frequent lockdowns, flight cancellations, travel hesitation, Visa constraints, and now vaccine-linked passports. Perhaps leisure travel will take a longer time to reach the pre-pandemic level, forget about growth.  The picture is grim, and the reality is that we are facing stark challenges not only in the recreation and leisure sector but all spheres of life. 

But the future seems mired in pitch darkness because we have limited knowledge of the behavior of this deadly coronavirus. Our previous experience of Spanish Flue suggests that this will end with time after leaving millions of dead in its wake. It is too early to predict even though we have modern technology and research at our behest unlike in earlier times, but still there prevails an inexplicable confusion as to the origin of the disease. If it is zoonotic then nothing else is known of its long-term behavior. Things will get globally compounded if this is a lab virus mishap or a deliberate attempt. The scope of impact is greater than the World wars, and anything can happen in the time to come.   

At present, the industry is occupied by several questions? 

Will the emergence of variants spell complete doom?

Will the vaccines overpower? 

Will it become innocuous like seasonal flu? 

Will travel peak after the scourge is over? 

Lots of questions remain unanswered to this date. We rely on research and therapeutic solutions all the time, but we must also be hopeful of quick deliverance. The industry is bound by the virus for a long time even after emancipation, and thus travel hesitancy will hamper the flow of the tourists in near future. 

Post-Pandemic Impact at Glance

However, there would be many travel enthusiasts eagerly waiting for a quick getaway as soon as restrictions are done away with. They have sufficient funds which were stocked away during the lockdown. Then there are peripatetic travelers who would risk it without much hesitation. Not as much, but vaccination will further boost confidence albeit it will start with local travel first.  Hence those in the industry seeking this segment should be well-appointed with Covid 19 compliance, SOPs, and all. 

Health precedes adventure, and those not complying with the new normal will sink further.  Health and safety will be a dominating concern for travelers and there is no leeway as far as allaying concerns embedded deep in people's minds after the pandemic.            

The worst impact has been on the psyche of International travelers who have closely observed the sudden surge of the second wave and its devastating nature in India. The gruesome image of rows of funeral pyres well publicized by Western Media has further vitiated the prospects of safe travel in India. The country has experienced devastation at its worst this century and will have to submit all strength and resilience to come out of this tragic and deadly economic slowdown.   

Countrywide vaccination and a complete halt to the pandemic will not bring the trust back as far as inbound tourism is concerned.  Though the decline of the pandemic to innocuous numbers will open doors for travel, only those with enough confidence and the will to travel will head toward the Indian shores. The figures would be pathetically minimal not enough to revive the ailing industry.   

Already lagging behind countries that garner a greater share of overseas tourism, the lockdown, and International flight cancellation has further paralyzed the industry.  Even inland and outbound tourism has been staggered by the pandemic. Total uncertainty prevails. 

This is for the first time in the contemporary era that the whole of India has come to a standstill, not only niche sectors like tiger tourism which draw a large number of wildlife tourist enthusiasts to the country. All sectors that attracted overseas tourists have been badly hit. 

Intermittent relief has somehow kept local tourism alive but this start-and-stop phenomenon is discouraging the peripatetic Indians as well. The savagery of the second pandemic rebound is going to take a long time for the industry to revive as it has badly marred our psych for a long long time to come. 

The forecast of the third wave is further compounding our fear and confidence, and the travel hesitancy is palpable. Taken by surprise the second wave has shocked us to no end and has perpetuated fear that it might never go away. Forget the oncoming third wave however apocryphal it may seem, the ravage of the second wave, slow down, and deaths that followed have economically exhausted the industry. The sufferers belong not only to the small segment,  the big ones have been hit equally hard.   

It is time to show confidence in ourselves whence the pandemic becomes innocuous or is halted by extensive vaccination which India is fully capable of. If we begin to travel not only will the domestic tourism sector revive quickly but it will also showcase our resilience and capacity to fight back for good and thus encourage overseas visitors to head for our shores. 

Role of The Dispensations 

The only saving grace is that tourism sectors both inbound and local will experience a renaissance albeit much later, but till then the closures and extensive unemployment it causes will remain a major challenge. The pandemic has left a large number of the unskilled labor class, and the semiskilled unemployed in its wake. This segment is most vulnerable irrespective of the industry sector and will need assistance from the Government which anyway is being provided without hesitation, but there are many who may not have been the direct beneficiary. This only means there will be assistance gaps that will have to be filled up. For instance, micro and small business owners who have faced the worst brunt of the intermittent closures and the disease prevalence at a personal level are in dire need of economic revival if they have to survive, and providence is not going to prevail this time. 

The only way out of this quagmire is to open up all sectors fast, with the implementation of schemes and incentives not only at the Governance level but also boosted by the industrialists and big businesses. Vaccination is bringing back hope but much more has to be done.   

The tourism sector calls for urgent attention not only as regards infrastructure buildup but also for a widespread economic package full of incentives and relief. This has to come from both the Centre and the State Governments.  

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Uday is a content writer and SEO. He also teaches Digital Marketing in his home town Jabalpur. He loves to write on various topics. 

He can be contacted at:

pateluday90@hotmail.com

09755089323