Future of Indian economy after Coronavirus

Barclays is a UK based multinational investment bank and financial services company. It is headquartered in London. Apart from investment banking, Barclays is active in corporate banking, personal banking, investment management and wealth management. According to the Barclays the growth rate of the Indian economy could be zero in 2020. The reason for this is that the lockdown has been announced due to Corona virus. Its economic impact is more than expected. The British bank had earlier reduced India's growth forecast from 4.5% to 2.5% based on a 21-days lockdown.

Even though the community spread of Covid-19 has not been officially announced in India, there is going to be more economic loss due to the lockdown. The shutdown is also affecting areas that are considered 'essential'. These sectors include mining, agriculture, manufacturing and utility sectors.

Given the disruption in many service sectors, estimate the total economic loss to be close to $ 234.4 billion (8.1% of GDP). This loss has been imposed on the basis that there will be at least partial lockdown in India till the end of May 2020.

Barclays said that this loss is much more than that $ 120 billion. Given the expected loss to the economy, Barclays reduced its growth forecast for the calendar year 2020 to 2.5%. Similarly, GDP growth is projected to be 0.8% for the year 2021. The growth was earlier projected to be 3.5% for FY 2021.

This is the first time the country's economy is projected to grow by less than 1%. Apart from this, since the corona epidemic is affecting the whole world, India will have to face a lot of difficulties in financial recovery.

The International Monetary Fund (IMF) has projected India's growth rate to be just 1.9 per cent in 2020. The global economy is going through the worst phase since the Great Recession of the 1930s. The corona epidemic has stopped economic activity around the world.

If the IMF's prediction proves to be correct, it will be the worst performance of the Indian economy after the 1991 liberalization. However, the IMF in its latest edition of the World Economy report has included India among the fastest growing economies in the world.

India is one of the two countries that are projected to achieve positive growth in 2020. The other country is China. The IMF has forecast China's economic growth to be 1.2 percent. According to the IMF report, many countries included in the list of developed economies are expected to be in growth minus this year. These include the US (-5.9 per cent), Japan (-5.2 per cent), Britain (-6.5 per cent), Germany (-7 per cent), France (-7.2 per cent), Italy (-9.1 per cent) and Spain (-8 per cent).