Covid 19 Presentation and it's impact on India

It is slide regarding COVID 19 and it's related issues.

1. Impact of Covid-19 In India Presented By : 1. Vishnu Prasad Bisoyi (202110252)

2. Soumya Sambit Mishra (202110248)

3. Omm Prasad Rath (202110249)

4. Subhranshu Shekhar Sahu (202110251)

5. Manas Ranjan Das (202112253)

6. Subhashree Samal (202111255)

2. Updated: August 25, 2020 What Is Covid-19? COVID-19, caused by the novel coronavirus SARS-CoV-2, is a highly contagious respiratory illness. It originated in Wuhan, China, in late 2019, quickly escalating into a global pandemic. Symptoms range from mild to severe, including fever, cough, and difficulty breathing. Prevention measures include vaccination, mask-wearing, social distancing, and hand hygiene.

3. Updated: August 25, 2020 Preview of Results 1

4. Updated: August 25, 2020 Lockdown Imposes Heavy Economic Costs India’s GDP is estimated to have fallen by 30% during the country’s 9-week lockdown (compared to a no-COVID scenario) Food system is adversely affected by falling consumer & export demand (agri-food GDP falls by 5%, despite exemptions to the agriculture sector) National poverty rate increases by 22%-points during the lockdown (295 million more people temporarily living below the national poverty line) Economic impacts during 9-week lockdown period (changes are relative to a no-COVID scenario) 30 . 3 21 . 9 135 . 1 295 . 5 Percentage decline in national GDP Percentage decline in a g ri - f o o d sy s t e m 5 . GDP Percentage point increase in national poverty rate Decline in national GDP in US$ billions Increase in number of poor people in millions Source: India SAM Multiplier Results

5. Updated: August 25, 2020 Costs Likely to Persist Throughout 2020 Economy is gradually reopening & many restrictions are easing But economic losses remain, even with a faster easing (GDP may be 9-13% lower in 2020 compared to a no-COVID scenario) Average GDP & poverty rates for 2020 hide sharp mid-year deteriorations (many people & businesses may require government support to cope & recover) Change in quarterly GDP Change in national poverty rate (National p o v er t y li n e) Quarterly national impacts under faster or slower recovery scenarios (changes are relative to a no-COVID scenario) -26% -6% -30% -16% -1% -5% Q 1 Q 2 Q 3 Q 4 -2% -2% Faster recovery Slower recovery 4% Source: India SAM Multiplier Results 1% 1% 1% 21% 19% 1 % 3% Q 1 Q 2 Q 3 Q 4

6. Updated: August 25, 2020 COVID-19 Outbreak & Lockdown Policies in India 2

7. Updated: August 25, 2020 Sectors Affected by Lockdown Policies (1) Sector Lockdown restrictions or exemptions in targeted regions Directly Affected? Agriculture Farming activities exempted (essential sector) Movement restrictions occurred just after planting for winter crops Limited extension visits to farms, suspended development projects Minimal Mining & crude oil Extraction operations shut down Minimal Manufacturing Food processing & medicines exempted (essential sectors) Movement restrictions affected many operations Nonfood producing companies closed High Utilities Electricity & water distribution exempted (essential sector) Minimal Construction Construction projects/sites closed, including most public works High Wholesale & retail trade services Retailers of essential goods exempted, with limited trading times Social distancing restrictions affected market activity High Transportation, storage & cargo Air travel closed; cargo/freight transport exempted (essential sector) Inter-district passenger transit closed Urban passenger transit reduced High Hotels & food services Hotels, restaurant, cafés, bars closed apart from take-away foods Limited delivery options for food or other products High

8. Updated: August 25, 2020 Sectors Affected by Lockdown Policies (2) Sector Lockdown restrictions or exemptions in targeted regions Directly Affected? Banking, finance & insurance Banks operating through digital platforms Other financial institutions closed or teleworking (e.g., insurance) Minimal Professional & business services Almost all closed or teleworking (e.g., legal, accounting services) Activities involving in-person field visits affected (e.g., engineering) Minimal Public admin & law enforcement Public services & agencies remain open, but most staff teleworking Police & security services exempted (essential) Minimal Education services All public schools closed without much scope for online delivery All private schools closed with some online materials Some Health services Health services exempted (essential) Elective operations reduced but rising number of COVID patients Minimal Sports & entertainment Sports & outdoor entertainment banned Some activities operating (e.g., newspapers, radio & TV) High Other services In-person religious gatherings banned Informal repair firms limited due to movement restrictions High

9. Updated: August 25, 2020 Global & Other Nationwide Shocks Sector Lockdown restrictions or exemptions in targeted regions Directly Affected? Export demand Reduced international tourism & business travel Lower export demand for mineral exports Lower export demand for agricultural, other products High Remittances Decline in value of remittances sent by nationals working abroad Some Go v er n me n t revenues Nationwide Fall in tax revenues due to decline in economic activity Some See detailed sector-level assumptions about production & demand shocks in Annex at the end of slide deck

10. Updated: August 25, 2020 Measuring Economic Impacts 3

11. Updated: August 25, 2020 Economywide Multiplier Analysis Lockdown policies & shocks have direct impacts on the operation of certain sectors e.g., closing businesses, restricting travel, etc. But they also generate indirect impacts on other sectors involved in supply chains i.e., input suppliers & downstream users Multiplier analysis uses sector input-output data to measure direct & indirect impacts throughout & across supply chains Includes impacts on GDP, jobs & household incomes India model based on 2017/2018 social accounting matrix (SAM) & Household Consumption Survey 2011-12 (68 th round) (results scaled to 2019 GDP & employment levels)

12. Updated: August 25, 2020 E co n o m y w i d e Impacts GDP | jobs Incomes | poverty Direct i m p a c t s Framework for Analyzing COVID-19 G l ob a l I m p a c t C h a n n els (Due to partial or full lockdowns in other countries) I n d i r e ct i m p a c t s D o m e s t i c I m p a c t C h a n n els (Due to partial or full lockdowns in own country) Export demand Remittances & migration Foreign direct investments Agriculture Mining & crude oil Manufacturing Utilities (energy, water) Construction Whole & retail trade services Transportation, storage & cargo Hotels & food services Banking, finance & insurance Professional & business services Public administration & law enforcement Education services Health & social services Sports & entertainment Community & other services

13. Updated: August 25, 2020 Impact Channels & Shocks Lockdowns are simulated using a range of impact channels Shocks to each channel are imposed on the model & impacts are simultaneously traced across all supply chains Multiplier model separates entire India economy into 86 sectors (Shocks imposed on final demand that leads to the fall in production) Shocks estimated using: Community mobility data from Google Press Note on Estimates of GDP for Q1, 2020-2021 from Ministry of Statistics, Government of India

14. Updated: August 25, 2020 Key Assumptions Lockdown period Government introduced national holiday for 9 consecutive weeks (25 March to 31 May) 1-week lockdown period imposed in Q1 (January-March) while the remaining 8-week imposed in Q2 (April-June) * Assumptions All shocks are imposed nationwide given the broad scope of the government’s lockdown directive Shocks are weighted by importance of Q2-2020 for sectoral GDP 3 5 % 3 % 2 5 % 2 % 1 5 % 1 % 5% 0% T o tal G D P C r u d e oil C ro p s Food processing Hotels & food services Q1 Q2 Q3 Q4 * January-March is the fourth quarters of the government’s fiscal year (April-March)

15. Updated: August 25, 2020 Scenarios 1 3 J a n F eb M ar A p r M a y J u n J u l A u g Sep Oc t N ov D e c Q 1 Q 2 Q 3 Q 4 Full lockdown period Easing of restrictions in Q3 Final easing by end of Q4 ( po ss i b l y i n c o m p le t e recovery) Easing r e s t ri c t - ions during rest of Q2 2 1 • Impacts during 9-week lockdown period (26 March to 30 May) 2 3 • Impacts throughout 2020 by quarter Compare a faster vs. slower easing of restrictions

16. Updated: August 25, 2020 Economic Impacts During the Lockdown Period 4

17. Updated: August 25, 2020 GDP Losses During Lockdown National GDP drops 30% during the 9-week lockdown (most economic losses occur in the industry & services sectors) Assumes restrictions are not expanded or reintroduced -30.3% -0 . 7% -42.0% -31.4% T o t al Change in total GDP during lockdown period (%) Agriculture Industry S e r v i c e s -$135.1 Source: India SAM Multiplier Results -$0 . 4 -$54.2 -$80.5 T o t al Change in total GDP during lockdown period (US$ bil.) A g ri c u l t u r e I n du s t ry S er v i c e s

18. Updated: August 25, 2020 Sources of GDP Losses Falling in construction activities & restrictions on non-essential manufacturing activities account for half of national GDP losses Contribution of lockdown restrictions & shocks to loss in total GDP during lockdown (sums to 100%) Large knock-on effects on manufacturing sectors, such as textile industries C lo s i n g sc h o ols h a s m o d e s t negative GDP impacts Remittances is important for household incomes & consumption spending, which indirectly affects GDP 29 . 5% Source: India SAM Multiplier Results 20 . 6% 20 . 5% 15 . 5% 14 . 3% 3 . 1% 2 . 3% 2 . 1% 2 . 1% . 9% Limiting construction activities Reduced export demand Closing non-essential manufacturing operations Closing non-essential wholesale/retail trade Transport/travel restrictions Domestic workers & other services Banning sports & other entertainment Closing all schools in the country Closing hotels, bars and restaurants Falling foreign remittances Limited labor supply during lock down la r g ely a f f e c t ed c o n s t r u c t i on a c t i v i t ies Fall in export due to disruption in global market demand Restriction on people movement reduced transport/travel services

19. Updated: August 25, 2020 -5 . 0% . 7% -6 . 1% -11.9% -33.6% Impacts on the Agri-Food System The largest impact from lock-down policy mainly hit food services, while food supply is exempt from most restrictions (food services are directly affected by the closing of hotels, restaurants & bars) Share of total GDP in 2019 (%) (26.8%) (17.2%) (1.8%) (6.8%) (1.0%) Change in agri-food GDP during lockdown period (%) Source: India SAM Multiplier Results Change in agri-food GDP during the 9-week lockdown period (US$ bil.) -$5 . 1 $0 . 4 -$0 . 5 -$3 . 5 -$1 . 5 Agri-food system Agriculture Agro-processing Food trade and transport Food services

20. Updated: August 25, 2020 Sources of Agri-Food System GDP Losses Significant disruption on manufacturing and construction activities created significant spillover impact to the food system Contribution of lockdown restrictions & shocks to loss in agri-food GDP during lockdown (sums to 100%) Few agricultural exports directly affected, but falling nonagricultural exports reduces consumer incomes & food demand Falling remittances are also more important for the food system because households spend a large share of their incomes on food 26 . 6% 23 . 6% 15 . 8% 13 . 5% 8 . 3% 7 . 1% 2 . 1% 1 . 1% . 9% . 5% Closing non-essential manufacturing operations Limiting construction activities Reduced export demand Closing hotels, bars and restaurants Transport/travel restrictions Closing non-essential wholesale/retail trade Falling foreign remittances Domestic workers & other services Banning sports & other entertainment Closing all schools in the country Manufacturing and c o n s t r u c t i on a c t i v i t ies a re worse affected reducing household income and hence food demand Closing food services affected overall food demand Source: India SAM Multiplier Results

21. Updated: August 25, 2020 Unpacking Agricultural GDP Impacts Change in GDP during the lockdown (%) (changes are relative to a no-COVID scenario) Share of a g ri c ul t ural G DP in 2019 (%) (3.7%) (13.4%) (3.5%) (1.4%) (12.5%) (6.4%) Bumper harvest in Rabi season increased mainly cereal production Decline in investment spending & c o n s t r u c t i on a c t i v i t ies r e d u c es d e m a n d for timber & wood products Falling export demand hurts e x p or t -orie nt ed c r o p s , l i k e c o tt o n -1% 0% 4% 2% 2% 2% 1% -1% -4% -1% -1% -1% -3% -3% Agriculture C r o p s Cereals (14.4%) Pulses & oilseeds (6.8%) Root crops Fruits & vegetables Sugarcane Beverage crops Traditional export crops Livestock Meat & eggs (6.0%) Dairy (24.3%) Forestry (7.6%) F i s h i n g Sluggish demand coupled with disruption in transportation sector caused reduction in fish supply Source: India SAM Multiplier Results

22. Updated: August 25, 2020 Unpacking Food Processing GDP Impacts Change in GDP during the lockdown (%) (changes are relative to a no-COVID scenario) Declines in meat, fish, fruits & vegetables driven by falling consumer demand with implications for dietary quality Combination of Food processing and Beverages & tobacco share make up 100% (91.9%) (13.0%) (3.6%) Demand reduction from restaurant and other services activities generate negative spillover effects on food processing industries. Beverages & sugar refining badly affected by closure of hotels and restaurants -7% -22% -28% -3% -7% -5% -13% -2% -5% -4% -2% Food processing Meat (6.3%) F i s h D a iry Fruits & vegetables (2.7%) Fats & oils (3.9%) Cereal milling (34.6%) Sugar refining (2.3%) Coffee, tea, etc. (13.1%) Other foods (12.4%) Beverages & tobacco (8.1%) Source: India SAM Multiplier Results

23. Updated: August 25, 2020 Impacts on Household Incomes Source: India SAM Multiplier Results All households experience large income losses (smaller losses for rural farm households because farming/food trade is exempt) Larger income losses for higher-income households (but we do not consider how these households have savings & assets that can help smooth income shocks) -29% -25% -30% -23% -12% -34% -33% Change in household incomes during lockdown (%) (changes are relative to a no-COVID scenario) All households Quintiles 1-2 Quintiles 3-5 Rural Rural Farm Rural Nonfarm U r b an

24. Updated: August 25, 2020 Poverty Impacts During the Lockdown National poverty rate increases by 22%-points during the lockdown period (≈ 295 mil. more poor people) (poverty rate is the share of the population with consumption spending below the national poverty line) Increase in share of population living in poverty during 9-week lockdowns (%-points) 21 . 9% 21 . 8% 22 . 0% National R u r al U r b an Increase in number of poor people in India during 9-week lockdown (mil.) 295.5 210 . 5 84 . 9 National R u r al Urban Source: India SAM Multiplier Results

25. Updated: August 25, 2020 5 Economic Impacts Under Fast & Slow Easing of Restrictions & Recovery

26. Updated: August 25, 2020 Recent Data | Changing Mobility People’s movements suggest a slow “return to normal” activities (changes in mobility relative to Jan-Feb activity) - 8 . - 6 . - 4 . - 2 . . 2 . 4 . -100.0 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 Feb Mar Apr May Jun Jul Aug Sep Source: Google mobility data Percent change from normal activity (Jan to mid Feb) retail and re c r e a t ion g r o c e r y a n d pharmacy p a r k s transit stations workplaces residential

27. Updated: August 25, 2020 Easing of Restrictions & Recovery Predicting India’s “post-lockdown” period is challenging Consider two stylized scenarios: Faster easing : Economy rebounds strongly in Q3 & largely returns to normal by Dec 2020 Slower easing : Modest rebound in Q3 with productivity in Q4 still below pre-lockdown levels F a s t R e c o v er y (faster easing & recovery) Slower Recovery (gradual easing, slow recovery) Q1 Jan No lockdown restrictions or global shocks in this “pre-COVID-19” period Feb Mar 9-week lockdown (last week of March until end of May) Global shocks start in late-March Q2 Apr May Jun Losses reduced by 50% Losses reduced by 10% Q3 Jul Losses reduced by 90% Losses reduced by 50% Aug Sep Q4 Oct Losses reduced by 99% Losses reduced by 90% Nov Dec

28. Updated: August 25, 2020 GDP Impacts with Recovery Scenarios National GDP is 9-13% lower over 2020 as a result of COVID-19 (given pre-COVID-19 growth trends, India may well lose more than a year of growth) -30 . 3% -18 . 7% -26 . 4% -6 . 5% -28 . 1% -29 . 6% -16 . 3% -4 . 8% -9.0% -13 . 2% A p r i l M a y - J un e Q 1 Q 2 Q 3 Q 4 -1.1% -2.5% 202 Change in quarterly & annual GDP under two recovery scenarios (changes are relative to a no-COVID growth scenario) Second quarter Quarterly averages A n nu al Faster easing & recovery Slower easing & recovery Source: India SAM Multiplier Results

29. Updated: August 25, 2020 Cumulative Quarterly GDP Losses Even with faster recovery, India ends 2020 with lower GDP (GDP losses accumulate each quarter & will take time to recover to pre-COVID levels) Cumulative changes in 2020 GDP from end of 2019 (pre-COVID expected growth rate for 2020 was 7.5 % according to IMF’s 2019 Economic Outlook) 200 150 100 50 -50 - 1 00 - 1 50 - 2 00 E n d o f Q 1 2019 Q 2 Q 3 Q 4 US$ billions Pre-COVID expected growth Lockdown + Faster easing & recovery Lockdown + Slower easing & recovery Source: India SAM Multiplier Results

30. Updated: August 25, 2020 Poverty Impacts with Recovery Scenarios 1 . 4% 3 . 8% . 6% Poverty should stabilize by end-2020 as people return to work, incomes recover & consumer demand resumes (but this hides sharp spike in mid-year poverty, when many households living close to the poverty line will require government or other support to cope Change in national poverty rate with fast or slow easing of restrictions (changes are relative to a no-COVID growth scenario) 21.2% 18.5% 1 . 2% 2 . 7% Q 1 Q 2 Q 3 Q 4 Quarterly averages Faster easing & recovery Slower easing & recovery Source: India SAM Multiplier Results

31. Thank You