THE PERIOD OF BUTCHERED ECONOMY

Economy during COVID 19

 

It was a pleasant day and I was out with my friend. We got pizza, subway sandwiches and drove around with loud music in her car. Half an hour through the outing, my friend and I both got a call from home and were asked to come back home immediately. Corona virus had hit our city too, and of course, our parents were worried. My friend drove us back home safely and the next thing we knew was that the government declared a nationwide lock down for 21 days. When the 21 days period was about to end, our prime minister Shri Narendra Modi announced that the lock down was further extended, and this went on for approximately more than 2 months. It is the time of a pandemic, COVID-19 also known as corona virus. COVID-19 originated from China, the country that is known for its highest population followed by India and then the United States. This pandemic has hit 210-215 countries around the globe because of which the economy of these countries is in jeopardy. India has already gone through 4 phases of quarantining but the virus spread is still out of control and the numbers of cases rise every day. People are dying while on the other hand, the country’s economy is depreciating.

Manmohan Singh once said, “India happens to be a rich country inhabited by very poor people.” India is one of the nations that were significantly strained given its economic statistics. India is considered to be under top 100 countries that are poverty-stricken with 21.9% of its population below the poverty line. Being a nation with its Gross Domestic Product (GDP) collapsed 4.5% during the July- September quarter 2020, which is the lowest GDP in the last six years it makes one wonder how long will India need to stabilize itself? The economy has severely slowed down and it seems that it will take a long time to recover from the fall. Another might ask will India pull through this period as a rich country with its poor people? On one hand, we have the poor community that is suffering and on the other hand, we have the rich in the country sitting inside their well built four walls with almost all facilities available to them. It is quite doubtful if the poor will be able to survive this phase.

 

Additionally, the utmost sink in the financial system is observed in various sectors, firstly services and manufacturing. The industries are shutdown, sending the laborers home unemployed and without their wages to take care of themselves. These industries would not be opened unless the government itself gave them permission to do so. Some companies that were operating with a cut short number of staff members reduced their salaries because of a drop in demand supply. The only major industries that are allowed to operate during this shut down are the pharmaceutical manufacturers. New startups, small or big hit an iceberg. Their new establishments faced a huge challenge in their premature stage and some might not last until the economy stabilizes. Some of the owners of these start-ups are put under more stress due to debts, making it difficult for the people to survive and get through this pandemic. Studies show that 30%-40% start-ups are so far bleeding out and have temporarily or permanently come to stand-still.

 

The least impacted sectors after pharmaceutical are food and sanitation for necessities, followed by Amazon and Netflix majorly for entertainment purposes. The demand-supply of the food sector was secure but rushed since the citizens were asked to stock up basic necessity goods, while the graph of sanitation went up with the conditions of COVID-19 getting worse. Amazon witnessed an increase in its net income in the first quarter of 2020 by 26% compared to the first quarter of 2019. However, their net income dropped from $3.6 billion to $2.5 billion. It is believed that Amazon spent a share of its income in fighting the crisis of COVID-19. But, this does not certainly mean that the company was in a loss. Netflix profited with 15.8 million global subscribers which was much more than their prediction of 7.6 million. The net income of Netflix was double the earnings of last year, in the first quarter. Boredom caused by the lock down urged the people to binge-watch and Netflix being known as one of the oldest and well-known streaming service provider ended up as a greenback boogie. According to me, Amazon has clearly won the challenge of coping with the disaster due to the company reaching out to its employees and look after their welfare with their net earnings.

 

The second sector affected is of travel and tourism. Appropriate measures were taken to rush the tourists back to their respective countries. People were tested on almost all airports with COVID-19 testing kits and passengers who tested positive were immediately quarantined. Soon the international airports were securely closed across the globe, followed by trains and all other public transports. The public transport was halted as well as people were not allowed to step out of their houses other than the allotted hours by the authorities. Here, the migrant workers are held up far from home without a roof to live under and many away from their families with little or no money at all. Most of these migrant workers are considered below the poverty line, meaning that they cannot afford to stock up their necessities like food and water or proper sanitation facilities to keep them safe from the spread of corona virus. Therefore, the poor are more troubled with major unemployment, starvation and more vulnerable to the virus as compared to the middle and high class citizens. It scares me knowing that the lives of these migrant workers were so uncertain when our planet is struck with panic.

 

This pandemic has majorly affected the countries’ occupational domain and its economy. At the early stage of the corona pandemic, no one had predicted that corona virus could spread so aggressively shake up and butcher the financial markets. The population that is considered to be under poverty was struggling more than ever because of sudden unemployment and scarcity of jobs in the market. Not being able to feel safe at such times can be horrifying and scary. The hit of this virus has drastically affected everyone’s life in some or the other way in the whole world. The future has been rather unpredictable at this stage where the conditions get better but relinquish suddenly.

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