Thursday, October 21, 2021
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CORONAVIRUS: Impact On Business And Economy

The COVID-19 (coronavirus) outbreak is a reminder that the growth of mankind is negligible. We may have armed ourselves with nuclear weapons even then a small virus can take us 20 years back. The novel coronavirus has affected everyone’s life be it a daily wage worker or a business tycoon.

The business sector can be considered as most affected by the virus. More than the virus it was hit by the lockdowns and certain restrictions imposed by the governments of different countries.

Due to lockdowns every shop excluding the one dealing in essential commodity were shut down, which resulted in huge losses. On top of it many business owners were paying their employees salaries which means there was no income but the expenses were still the same.

The story does not just end here, even after the lockdown was lifted there are many restrictions imposed by government like night curfew till date. So even after 10 months from the date the lockdown was imposed, still no business can say it is back on track.

WHICH INDUSTRIES ARE MOST IMPACTED BY CORONAVIRUS

Hospitality and travel industry are the industries which are affected most by COVID-19. All thanks to lockdowns, travel cancellations, restaurant and bar closures, and low consumer confidence. Manufacturing and construction industry have also largely affected but these industries could revive as soon as consumer demand will rise.

Travel and Hospitality would suffer for a long time due to ban on international travels and because different states are imposing different restrictions also travelers don’t have confidence in travelling as they are afraid that they might catch the virus.

Government on the other hand is working unpredictably, one day it is trying to promote tourism by introducing new schemes for travelers and the very next day it is imposing night curfews, travel bans from various states, etc. Due to this nature of government travelers are afraid that they might end up in spending half a month in some quarantine center or something like that. 

Why is coronavirus impacting Small businesses the most?

Around 99% of all businesses are small businesses, and they employ about half the workforce in the country. Most small businesses lack the cash reserves to even weather a month-long interruption and we are talking 10 months here. Due to lack of cash reserves with the small businesses the unemployment rate is also increased as small businesses are no longer able to provide employment.

How the economy is affected?

If you will simply take a look at the stock market you will understand that coronavirus has led us to a volatile economy, but there are numerous other factors at play. The severeness of the situation can be analyzed just by looking at some stats; India’s Gross Domestic Product or GDP growth rate contracted by 23.9% for the first quarter of the current financial year.

How will we bounce back?

The share markets around the globe rose drastically as soon as Britain permitted the use of vaccine which was a good sign for the economy. Indian economy’s GPD improved from -23.9% for the first quarter to -7.5% for the second quarter. These are some of the facts which shows that economies around the world are recovering from the pandemic but it is difficult to say that how will it take to fully recover.

Although these news came as a hope for mankind, but the new coronavirus strains which were found recently in Britain might pull us back to the point where we started. The bottom line is that it will take 2-3 years for the world to recover from the damage. Till then we need to follow corona guidelines.

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