Mar 21: India’s economy, already in the grip of a slowdown, is in for more pain after Prime Minister Narendra Modi appealed to citizens to stay at and work from home to curb the coronavirus outbreak.
The services sector, which accounts for about 55% of India’s gross domestic product, is poised to be the worst hit after Modi, in a late evening address on Thursday, urged citizens to go on a self-imposed curfew for a day and private companies to allow employees to work from home for longer. In the country’s vast informal sector, social-distancing measures could mean a dent to productivity and consumption because of job or pay losses.
“The impact of a partial lock-down or social distancing will be significant,” said Rahul Bajoria, a senior economist at Barclays Plc in Mumbai. “If there’s a widespread community outbreak, GDP could fall as low as 3.5% in the year starting April 1.”
Shrinking output may limit growth in an economy that’s already set to expand at an 11-year low of 5% in the current year to March 31. Before the virus outbreak, India had forecast growth to recover to 6%-6.5% in the next fiscal year. S&P Global Ratings and Fitch Ratings have already slashed their growth forecast by 50 basis points.
“The current social-distancing measures will severely impact airlines, hotels, malls, multiplexes, restaurants and retailers,” according to analysts at Crisil Ltd., the local unit of S&P Global. “Lower footfalls and occupancies, decline in business volume and sub-optimal operating efficiencies will impact cash flows of companies in these sectors,” wrote the analysts led by Chief Economist Dharmakirti Joshi.
The government will try to announce a relief package for virus-affected sectors as early as possible, Finance Minister Nirmala Sitharaman said Friday.
In a televised address, Modi advised all citizens to stay at home for a day on March 22, as he sought to stem the spread of the coronavirus -- cases of which are relatively low in India at about 200, compared with more than 200,000 infected people globally. His government also barred incoming flights for a week from that day, joining a growing list of countries effectively sealing their borders.
What Bloomberg’s Economists Say
We had only earlier this week lowered our GDP outlook to consider the direct impact of the local outbreak as confirmed virus cases exceeded 100 as of March 15 and the federal and state governments announced social distancing measures that have already started to crimp economic activity. We are now revising down our GDP estimate for 4Q fiscal 2020 to 3.3%, from our 3.5%.
-- Abhishek Gupta, India economist
For more, click here
“Consumption being the biggest component of GDP, a lock-down is bound to have a big impact on the economy,” said Devendra Kumar Pant, chief economist at India Ratings and Research, the local unit of Fitch. “Modeling uncertainty in any system will be very difficult, but one can say the slowdown could deepen or prolong further.”
Work From Home
While companies, including billionaire Mukesh Ambani-controlled Reliance Industries Ltd., are asking employees to work from home, the option isn’t feasible in India’s vast informal sector.
“The option to work remotely simply won’t exist for most,” said Shilan Shah, an economist with Capital Economics Pte. in Singapore.
As many households don’t have savings buffers, the government would probably have to back this up with large-scale cash handouts that reach the poorest, he said.
Work from home is posing implementation challenges for the manufacturing sector where workers are required to be physically present at the production sites. The services sector, such as banking and information technology, also needs employees to be present in offices as confidential data is used, according to industry group Federation of Indian Chambers of Commerce and Industry.
Comments
First teach your own men to stop intolerance.
Are you people blind not seeing surge in oppression of poor.
You don't want people to raise their concern when you do all harms to poor and minorities.
Teach patriotism and tolerance to your own men.
Teach them to Denounce Godse who killed the father of Nation who gave you an identity to call you as proud Indian.
Muslims do not need any extra teaching from others.
They have full guidance from their God
Now if you are a true concerned of your nation, then at least learn what is teaching of Islam, just adapt in your routine life.
RSS should come forward to punish the killer of mahatma gandhi. They should ban Nathuram Godse's supporters.
RSS founder and its founding members already proved their patriotism during the time of India's freedom struggle!! We Muslims in India proved our patriotism from Shaheed Tippu Sultan\s time till now, we no need any advice from RSS. A Muslim is not a complete Muslim unless he is not patriotic to his country where he/she live, this is our Prophet's word."
Dear Mr. Indresh Kumar,
Please make sure that loving one's country and its people is a good traits of the Muslims as our beloved Prophet Muhammed (peace be upon him) has said: \Love of your country (patriotism) is a part of your faith.
Never be under the opinion that Madarasas are not teaching patriotism. We love our country as you love.
Patriotism is love of one's country, loyalty and devotion to it, desire to grow and prosper collectively or as a community, and you need to understand that we muslims are being dignified citizens of India proud to say that many of our patriotic ancestors have sacrificed their blood and life during the freedom struggles of our great nation. Please make sure that Islam does not forbid a Muslim to love his homeland or the country in which he lives or grows up.
Almighty Allah says: \"O Mankind! we have created you from a male and a female, and made you into nations and tribes, that you may know one another. Verily the most honorable of you with Allah is that (believer) who has Taqwa, Muttaqoon (pious)\". Verily Allah is all knowing all aware (Quran Chapter Hujuraat, verse No. 13).
May God help all of us to live in peace in this great Nation, INDIA."
RSS should learn what is PATRIOT not the muslims or madrasa childrens.
RSS - Stop making communal voilences,bomb explosions and divie an disturbences in the society.
Preach the patriotism to thier affialitaions like VHP, Bajrangees and Goodaisms groups.
ont question Muslims patriotism.
Yes thats why you are alive.....................
we know how to LOVE our country ,Quran teaches us very nicely , we are all patriotic Indian muslims, our country is our home
Muslims love India more than you do......unlike Nathuram Godse who killed Gandhiji....
Killer of Mahatma Gandhi speaking of Patriot..
No Need Advice from RSS For Muslim
Love your country is part of islam .....
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