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Apart from being a great danger to lives, the deadly coronavirus has the potential to ruin the world’s economy. The World Health Organisation (WHO) has declared its spread a pandemic. The infection has so far claimed nearly 6000 lives worldwide and is currently threatening to lower the economic growth rate by 2.5 per cent. The expected loss is 2 lakh crore dollars. All rating agencies have predicted a gloomy economic scenario for a long period. Experts claim that it is the worst-ever attack on the world’s economy after the recession in 2008. Everything all over the world has come to a standstill. No one knows when the world will be free from the threat of the coronavirus and limp back to normalcy.
Though medically the situation is much better in India than in some other parts of the world and the government has taken timely steps, the Indian economy will take a long time to regain its health even after the threat of this deadly disease is over. In other words, this threat has come at a wrong time for India. India’s economy was already in stagflation which means the economy was not creating enough demand. To get rid of such a situation, the government provides cash to citizens. But in the present scenario, the practice of providing funds will not yield any benefit as most shops are closed; recreational activities have stopped; even educational institutions are also closing down. So, there is no way to increase the expenditure to create demand. The matter became worse as several big economies in the world have also been affected by the virus. The crisis has broken the service chain of the world. China being the breeding ground of the virus has been forced to stop exporting items essential for the world’s market. It may be mentioned here that because of China’s liberal economic policy at present almost all multi-national companies have their production units in the country. Further, because of the presence of multi-national companies, many foreign travellers were present in China. They have all now returned to their respective countries and Europe has now become the most affected continent. Even the American economy has also been affected. So, the revival of aviation, travel, hospitality and other related industries in the near future will, when it does, take time.
At present, no one knows when the threat will end. Till the threat is completely over, it is unrealistic to plan for the revival of the economy as no one knows how long the world will be under siege. What is possible at this moment is to calculate the losses. The impact of tourism restrictions on nations dependent on tourism can be judged easily. For instance, a small country like Nepal will lose millions of dollars for banning visitors to Mount Everest. Nearly 20 thousand people there have lost their jobs. It is expected that the economic slowdown in Nepal will place an extra burden on India as it is a neighbouring country. The virus has affected the world’s economy both globally and locally. In both the cases, the wounds will take a long time to heal. Developed countries may find ways to recover from the loss, but the effect of the coronavirus is severe on developing nations. The only silver lining is that fuel prices have touched a new low. Can the Indian government use it as a stimulant to revive its slowing economy? Let India show the world the path to recharge the global economy.