India is currently facing the global Coronavirus pandemic, which is causing various economic issues. On 23rd April 2020, the Fitch Ratings, in its Global Economic Outlook (GEO) declared that India’s GDP (Gross Domestic Product) would slip to 0.8% for April 2020 to March 2021, from 4.9% growth during the previous Fiscal Year.
It further mentioned that the World GDP is expected to fall by 3.9% in 2020 as part of the Recession in the post-war period.
A recent report suggested that the recession post-coronavirus-war would be twice as severe as the 2009 recession. Meanwhile, the World Bank also stated that India’s remittances are likely to drop by 23% from USD 83 billion from the last fiscal year to USD 64 billion this year. It also stated that globally the remittances are likely to decline sharply by 20% due to the economic crisis due to the global pandemic and lockdown.
Remittance flow is expected to fall across all World Bank regions. They are mentioned below:
|Region||Remittance Fall (%)|
|Europe and Central Asia||27.5%|
|Middle East and North Africa||19.6%|
|Latin America and the Caribbean||19.3%|
|East Asia and the Pacific||13%|
The decline in remittances in Pakistan is likely to be 23%. This means it is likely to come down to USD 17 billion this year from 22.5billion last year.
Remittances in Bangladesh is likely to come down to USD 14billion this year. This is a likely fall of about 22%.
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Fitch Ratings have predicted that the growth for India is expected to rebound to 6.7% in 2021-2022. Growth is expected to rebound to 1.4% in the last quarter of the 2020 calendar year. It further stated that the decline in 2020-2021 growth is mainly due to the decrease in consumer spending and fixed investment. Consumer spending has fallen to 0.3% from 5.5% year ago. A 3.5% decline has been recorded in fixed investment.
One of the main reasons for the recession is the fall in commodity prices, Capital outflows, etc. The lockdown in various countries has contributed much to the phenomenon.
According to the World Bank, over 40 million migrants in India have been impacted due to the lockdown that began on 25th March 2020 in India. The moving away of migrants from cities has not only impacted the livelihoods of a large proportion of people in India, but have also posed as an area of concern for industries that employ them.
The government has to now address the issue and deal with challenges both migrants and industries are facing. This phenomenon is bound to affect productivity in the post-lockdown period in India.
India is facing this challenge and the central government are taking measures to deal with the same. Robust measures are yet to implement. Special attention needs to be diverted towards migrant workers who are a huge part of the Indian employment system.
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