(Image source from: indiatvnews.com)

It is of no surprise that the economy it at its worst end across the world. With 1.3 billion citizens of the country under strict lockdown, India had to put a stop on its economic activities to prioritise people’s health during the Covid-19 outbreak.

This economic disruption amidst the Covid-19 outbreak is likely going to results in a permanent loss of 4% GDP for the country. The report was shared by Crisil research.

What this insinuates is even when the economy bolsters after the lifting of the lockdown, there will be some economic activity that won’t be recovered. This is what is believed to contribute to the 4% reduction in the GDP permanently.

The impact of this financial and economic crunch is going to be worse than the 2008 Global Financial Crisis, as per the reports from the Chief Economist at Crisil, Dharmakirti Joshi. The report further suggested that India will likely be able to recover the lost percentage of GDP by 2024. But, the catch is that the same is only going to happen if it grows at an average of 8.5% for the coming three years.

The recovery after the hit is also going to vary based on the sectors. The Crisil report said that the FMCG sector is likely going to witness mild impacts along with quicker recovery.

But, when it comes to hotels and restaurants, the process of recovery is going to be quite extensive and is likely to see quick decline too. The hotel and airlines sectors are going to be the worst hit, according to the economists.

Even a domestic rating agency which predicted India’s growth rate to be 3.5% for the financial year of 2020-21 has cut it down to 1.8%.

By Somapika Dutta