Economy and Coronavirus - Economy and Coronavirus at 2020 - Death, Hunger and Joblessness
Kuwait will now cut its total migrant population to 30% which is now at 70%. This will cause huge loss of jobs and future job opportunities. It will also cause a loss of remittances for various economies including India.
Coronavirus is having a long lasting effect on the economy of the world. With countries cutting on immigrants and stopping payments to the International organization, humanity will be the ultimate sufferer. With the advent of coronavirus, around 25 million jobs are at high risk worldwide in the organized sector.
In India, as per CIME around 12.2 crore jobs will be lost due to the lockdown including unorganized sector. Indian economy which was already going through a slowdown has now entered a full fledged lockdown phase which will have a very negative impact on the country’s growth. According to an article published in the Live Mint, around 136 million jobs are at immediate risk in India in the non-agricultural sector. The main issue is around the informal sector where the job is non-contractual as the reverse migration will have a lasting effect on the manufacturing, textiles, construction and other allied sectors.
The most affected sector due to the coronavirus pandemic induced lockdown is the tourism sector as they are dependent on the tourists for their employment. Due to travel restrictions, almost everyone is now stuck at their home and tourist spots are not open for visits.
The World Bank in their report Global Economic Prospects has said that the growth rate of India in this financial year will be -3.2%. This means that Indian Economy will shrink by 3.2%. The World bank has also said that almost 90% of the countries will go into recession and this will be the worst recession in the last 150 years.
The International Labour Organisation has also warned various countries about the loss of jobs and countries going into poverty. In their report, ILO Monitor 2nd Edition, they warned that around 400 million people in India can go into poverty due to coronavirus induced lockdown and the job losses. ILO also said that coronavirus will affect almost 81% of the total manforce of the world that is around 2.7 billion people. They also mentioned that around 195 million full time jobs will be lost due to coronavirus. This is the worst phase of joblessness, the organization mentioned.
In a report published in Livemint it has also been told that there has been a dip of 4.92% in the direct tax collection which has gone lower for the first time in 20 years. In the year 2018-19 the total direct tax collection of the government was ₹12.98 lakh crore and in the year of 2019-20, the tax collection has lowered to ₹12.33 lakh crores. This is also an indicator of the slowdown in the economy as the dip has been in the collection of corporate tax collection. This is also due to the various tax benefits announced by the government for businesses and the lowering of tax rates for businesses.
In a very recent move, Kuwait will now cut its total migrant population to 30% which is now at 70%. This will cause huge loss of jobs and future job opportunities. It will also cause a loss of remittances for various economies including India. This model later might be followed by other Middle Eastern nations and this will put a huge impact on India as India receives billions of remittances from these countries. As per IMF except for Djibouti and Egypt , no other African and middle eastern nation will show a positive growth rate. World economy is also expected to shrink by 5.2%.
The economic impact of coronavirus will be everlasting and one of the worst crises the world has seen in a long time. There will be a rise in poverty, joblessness and health crisis. With more than 8 million people infected till date and more than 400 thousand dead, this virus has left the world like nothing before. Once the world starts recovering, there will only be a new normal and a new way to handle the economic and health crises the world has entered.