Covid & the Financial Crisis
It will not be wrong if we say the current world is facing two pandemics. One of them is the health pandemic and the other is an economic pandemic which is the consequence of the first one. Both the pandemics are due to the COVID-19 outbreak which was initially started in china and now has spread to the entire world.
Both the pandemics are interrelated and are affecting our lives consecutively. The stock market is dropping gradually, live time investments of people in shares, stocks, and bonds are at great risk. Additionally, a major part of the population is unsure about their job continuity, salary & income.
As a consequence of the COVID crisis, our GDP has fallen from the cliff. Well, it was also going slow in 2019 but the drop in 2020 is huge.
Pandemic affecting the all
The pandemic is huge and is affecting all sections of society. Whether it is the migrant workers who are left with no income source and empty pockets. On the same hand, they are forced to live in camps with the hope in their heart that normal days will be back soon and they will be able to reach their homes.
This was the story of migrants and daily wage workers. But when it comes to the middle-class people, the sufferings are not less. Those who are working in the private sector are living in a pandemic of anxiety where they don’t know that- will they have their jobs by the time this pandemic ends.
Companies have started layoffs & pay cuts as they say the business is low and they can’t afford to pay the employees in full.
When it comes to the upper section of the society- the impact indeed is low but still, they are not an exception among those who are facing the economic impact of this pandemic. The share prices are dropping like a rock and their businesses are going through a great loss.
With the businesses closing and soaring, unemployment people have no financial fuel to run their livelihood. Hence it will be true to say that all these conditions have brought the second pandemic.
Though the effect is massive and our government is trying their best to fight the crisis. The major step taken towards it was announcements including a relief package by finance minister Nirmala Sitharaman. Insurance and coverage to the front line COVID warriors and then RBI’s moratorium for the loans. All these are great steps but still, a lot more is to be done. The relief package announced on March 26, is way far from the requirement. The money and grains promised to be distributed are to be done through PM Gareeb Kalyan Scheme and many more schemes like that, but here the concern point is all the people who need this package are not the cardholders. So, how will they be benefited from all this?
The Remittances & its effect on Economy
The breakout of COVID-19 & the lockdown across the world is also threatening the economic flow. Let’s know how our economy is being affected by remittances. Remittances from NRIs are important & major funding to the country. But due to the COVID outbreak, this is also a threat as the economists are saying that major effects on remittances can be due to falling crude oil prices. This is because more than 50% of them come through the Middle East. And the economy of many Middle East countries depends on oil revenue, and the recent drop in crude oil pricing has increased the risk of layoffs and immigration is hence more vulnerable there.
The COVID crisis is humanity’s biggest crisis since World War II as every country has been affected by this huge crisis.
Well, the birthplace of coronavirus which is China has been successful in controlling the pandemic and has opened its economy. But currently, china is said to be facing the second wave of the coronavirus pandemic where students and few people of china who were outside the country have brought it back to china.