Impact of first wave of Covid 19 on Indian Economy

Abstract

The outbreak of the Covid-19 pandemic is an unprecedented shock to the Indian economy. COVID-19 has been projected as worse than the Great Depression of 1930. The magnitude of the economic impact will depend upon the duration and severity of the health crisis, the duration of the lockdown and the manner in which the situation unfolds once the lockdown is lifted. Indian economy, however, has a slightly different story to tell at this hour of crisis. The silver lining for the Indian economy comes from a steep fall in the crude oil prices from around $70 per barrel to a record 18 years low of $22 per barrel. This windfall gain can, to some extent, offset the direct losses due to COVID-19. At the same time, dreams like a $5 trillion economy no longer look even a remote possibility. This article takes stock of the likely impact of COVID-19 on the Indian economy in the short term and the long term. A decision-tree approach has been adopted for doing the projections.