Introduction
The second wave of COVID-19 has not proved to be as economically harmful as the first one. The first wave of COVID-19 was a new challenge to businesses all over the world but now businesses have learned to cope with the situation. The impacts of both the waves on businesses have been different as there was a full stop to the businesses during the first wave unlike the partial operation of businesses during the second wave.
The chief economic adviser Krishnamurthy Subramanian said, “The impact of the second wave, which has caused significant devastation in terms of lives and livelihood, will not be large.” Business activities in India have declined due to restrictions on mobility. Aarav Infotech keeps tabs on the recent activities in the business world.
Impact of the Second Wave
- RBI thinks that the impact of the second wave on the economy and businesses is not as bad as it was in the first wave.
- There is an unpredictability about the localized lockdowns and the overall Corona situation which had made it impossible for small businesses to expect any growth or profit.
- As demand has been low the Overall Business Confidence Index (OBCI) has crashed. The low demand will affect businesses even after the second wave has abated.
- Private-sector economists have projected the GDP growth to decline to single digits after the second wave whereas the finance ministry in the Economic Survey has projected the GDP growth to be 11%. For more information go to https://timesofindia.indiatimes.com/business/india-business/covid-19-economists-see-deeper-impact-of-second-wave-than-govt/articleshow/83156675.cms.
- Moody’s Investor Service has reported a 10%decline in the GDP in fiscal 2021-22. But now it has reported a 9.3% growth in the economy which shows the uncertainty surrounding the economic condition and projections.
- Rural economies won’t see overall growth according to some economists just like they didn’t during the first wave.
- Household spending has lessened due to lesser demand which is a result of job loss or the demise of the bread earners of the families.
- 66% of the participant companies in the last FCCI survey expected better sales which have come down to 31% in the latest survey. For more details go to https://www.indiatoday.in/business/story/explained-how-2nd-covid-wave-has-impacted-indian-businesses-1809014-2021-05-31.
- Liquidation in businesses has been impacted and companies need more loans in a small period
Conclusion
It is necessary to know about the economic condition and other such factors to do business. Visit our website www.aaravinfotech.com for more information on such topics. Aarav Infotech would be happy to be capable of your service. You can mail us at sales@aaravinfotech.com.
Key Takeaways
- According to the RBI and chief economic adviser Krishnamurthy Subramanian, the impact of the second wave of COVID-19 is not as heavy as the first wave.
- Low demand has crashed sales and growth.
- State and central governments need to enforce more liquidation of money in the market to bring back normalcy.
- Rural economies will see the same decline and no growth as they did in the first wave.
- Private-sector economists predict a low rate of GDP whereas the finance ministry has the opposite opinion.
Written by: Jitendra Raulo
Jitendra Raulo is the Founding Director at Aarav Infotech India Pvt. Ltd., a leading Web Design and Digital Marketing Company with 11+ years of experience and having headquarter in Mumbai, India, and Support Centre at Bhubaneswar, India, he is actively working with Start-ups, SMEs and Corporations utilizing technology to provide business transformation solution.
