Over the past decade, India’s stance in the global economy has become irrefutable; making it a powerhouse that fuels and guides multiple sectors. Moreover, the Indian economy was just beginning to gain traction amongst other prominent world powers. Nonetheless, with the onset of the COVID-19 pandemic, India was faced with unforeseen challenges that the economy wasn’t equipped to battle. On the other hand, however, the COVID-19 pandemic proved to be an opportunistic time period that helped further develop and evolve the Indian economy.
COVID-19’s threats to the Indian economy
COVID-19 had multiple impacts on the Indian economy as with most other global markets. Some significant impacts were the illumination of the grave socioeconomic inequalities that still exist within India along with staggering economic contractions. India has grappled with numerous inequalities for years on end; whether they’re economic or social issues. During the pandemic, the poorer did indeed get poorer and a large proportion of the rich benefitted. According to the Consumer Pyramids Household Survey (CPHS) in India, between December 2019 and December 2020, rural poverty increased by 9.3 percentage points and urban poverty by 11.7 percentage points. Nonetheless, experts such as Swati Dhingra (LSE) have identified that such CPHS calculations are often underestimated and aren’t an accurate figure of India’s poverty standing. Hence, poverty has undeniably increased – a step back for a progressive Indian economy. Furthermore, housing and medical inequalities have multiplied with the onset of COVID-19. Social distancing is considered a privilege to which only a fraction of Indian citizens are entitled to. Those residing in traditional slums, for instance, were not able to maintain a necessary level of hygiene and cleanliness, as areas such as bathrooms and congregational rooms were shared amongst communities, allowing for the unhindered spread of the virus; weakening the labour force in large quantities. Moreover, with a lack of privacy comes the inability to reach out for help when it is most required. Women, especially, are left in a vulnerable situation where they are unable to seek help against gender-based violence (GBV) while trapped within four walls. Globally, GBV cases have been exacerbated as women have been isolated, often with their abusers. With the underrepresentation of GBV cases yet extreme increase in GBV cases, GBV has skyrocketed while women have been more unable to voice their abuse due to the pandemic, exacerbating gender-based issues. This has weakened the Indian labour force and confined women to the boundaries of their households. India’s GDP also decreased immensely, especially when the pandemic first hit. Between April and June 2020, India’s GDP fell by 24.4%, highlighting the necessity for the nation to explore differing industries to self sustain their economy.
Rising opportunities from COVID-19 in India
India asserted its stance at the forefront in the medical industry during the pandemic. Their prompt reaction to the shortage of vaccines was apparent very quickly. Arguably, India’s biggest competitor – China, was weakened due to the devastating impacts that COVID-19 had on the nation. Hence, India was able to strengthen its medical sector and efficiently develop a vaccine of their own – Covaxin. This allowed India’s economy to adapt to an everchanging environment where most other sectors, except the medical industry, were in the midst of economic turmoil. Such rapid adjustments to the current situation are a testament to India’s diverse and efficient reactions to current happenings and illuminated that the country can bounce back from economic shocks in a timely manner. Thus, India’s medical industry is proving to be a sector that cannot be ignored and could be India’s future.
What’s in store for India?
All in all, COVID-19 has had myriad effects on India’s ever-growing economy. It has posed several threats yet opportunities for the socio-economic fabric of the nation and questioned the economy’s integrity as well. It is imperative that India maintains its malleable tendencies wherein it’s able to adapt to changing times – as seen through its medical industry while questioning the undeniably unequal society that India has only seen exacerbate. Moreover, with its drastic reduction in GDP, it’s essential that India explores other ways to maintain its otherwise admirable GDP growth rates through self-sustaining techniques and the implementation of economically liberal policies.
This article was written by Shrishti Khetan, currently a student at the London School of Economics and Political Science, pursuing BSc Economics.