CORONA AND ITS IMPACT ON INDIAN ECONOMY
Context: The Centre has advised all states to avoid or postpone mass gatherings till Covid-19 is contained as various regulators and institutions went into prevention mode to arrest the spread of the novel coronavirus
- The infection has so far affected 31 people across India.
- As of March 5, 29,607 people across India were under observation through the Integrated Disease Surveillance Programme (IDSP) network for the novel coronavirus.
- One of the problems faced by people and health workers in India is the shortage of protective equipment such as masks and hand sanitizers in the market.
- The Centre has warned of stringent action against hoarding and black-marketing of these essentials.
- The Centre maintains there is no shortage of any Active Pharmaceutical Ingredients (APIs) or medicines even though 95% of the country’s API imports come from China, leading to supply chains being disrupted globally.
- The epidemic can be pushed back, but only with a collective, contained and comprehensive approach that engages the entire machinery of the government
- If countries act aggressively to find, isolate and treat cases, and to trace every contact, they can change the trajectory of this epidemic.
- Coronaviruses (CoV) are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS-CoV)and Severe Acute Respiratory Syndrome (SARS-CoV).
- A novel coronavirus (nCoV)is a new strain that has not been previously identified in humans.
- Coronaviruses are zoonotic, meaning they are transmitted between animals and people.
- Detailed investigations found that SARS-CoV was transmitted from civet cats to humans and MERS-CoV from dromedary camels to humans.
- Several known coronaviruses are circulating in animals that have not yet infected humans.
- Common signs of infection include respiratory symptoms, fever, cough, shortness of breath and breathing difficulties.
- In more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and even death.
- Standard recommendations to prevent infection spread include regular hand washing, covering mouth and nose when coughing and sneezing, thoroughly cooking meat and eggs.
- Avoid close contact with anyone showing symptoms of respiratory illness such as coughing and sneezing.
CORONAVIRUS -IMPACT ON INDIA’S GDP
- India’s limited presence in global supply chain network could help India with only a marginal impact on its economy and could benefit from fall in global crude prices and fall in US treasury bond yields
- The caronavirus is slowly spreading to the rest of the world which was largely concentrated in China, and is expected to have adverse economic consequences.
- If China’s economy slows to 1.2 per cent in January-March quarter, the GDP shock to India from the demand side could be about 0.4- 0.5 per cent
- But the rest of the world slows if China slows, particularly many South Asian and European economies.
- The Indian economy is relatively insulated
- It is not majorly integrated into the global supply chains and not a major exporter to the global markets.
- Indian businesses could benefit from a fall in crude prices by way of lower fuel and input costs.
- Besides, the cost of overseas borrowing would also decline as the yields on US Treasury bonds fall
Discuss the spread of coronavirus in India and its economic impact on India.(15 marks)