How Will India Be After Corona - Full Case Study About Indian Economy

When will this struggle of coronavirus end and how the Indian economy will be after that? And what is going to be next?

Will the recession grow or not?

Hey, this is Digital Keshav, In this article, I would like to share a full case study about the recession of India's economy after coronavirus and which businesses will grow or become down. This is my favorite subject, and here I share with you, the right information after good research.

As you all know, the recession had already arrived in our country. In December 2019 report, GDP growth was down to 6-year low in Q1 of 2019-20 financial year. The GDP growth is measured by comparing the data of the economic curves. So before having knowledge about the businesses' growth, you have to know about the types of economic curves.

There are 3 types of economic curves:

1. V-Curve

When the market and the whole industry is down, the economy goes down. In such a scenario, when the market and industry suddenly start to rise and grow, then it impacts the economy and it is known as the V-curve. It can be defined as the bounce-back of the economy of any country. V-curve is a rebound of an economy in a strong way that easily grow up its economy.

Coronavirus is sure to end after stage 5. As China is rebounding, all countries will have to rebound in the same way.


2. U-Curve

U curve means when the economy goes down for a while, and over time it has been down and down and down.

Sentiments of the market are not supporting and then after a while, it slowly rises back and suddenly gets up rapidly. This is known to be the U-curve of the economy. At this stage, the economy takes a very long time to rise or bounce back from the previous entanglements.

Multiple industries in India will take time to get back, which can lead our economy in u-curve.

3. L- Curve

In addition to v-shaped and u shaped economies, there is an L Shaped economy which is the alarming one. In this, the economy goes down and down and remains down. It is referred to as an L- shaped economy because the economy never goes up.

It took a long time for the industries and marketplace to come back. The economy is felt like kiln sat down. This situation may happen to those countries who are not able to fight against coronavirus.

According to Dun & Bradstreet's latest Economy Forecast, the GDP growth of India is expected to moderate further from our earlier estimate of 5 percent for FY20.

In such a situation, you can categorize the businesses into three types. One will be the winner, the second will be the loser and the third one will be in-betweener.

Winner Industries in this Pandemic

Let's understand this. Who is going to win?

1. E-Commerce Market Places: 

Yes, the e-commerce market place is about to be the winner. Due to this pandemic situation, Amazon has seen big portability and the businesses of e-commerce and Market Place has grown. At this moment, Amazon is looking to hire 100,000 employees to keep up with the demand in the phase of coronavirus.

A Chinese company called JD.COM, which is popular for their unmanned vehicle and unmanned Shop. Unmanned means where there is no man required. Their Unmanned warehouses are already based on technology. But they added a lot in their unmanned vehicles during this pandemic. They started offering their services by drone. They have given a lot of services in Wuhan by their unmanned vehicle.

2. Entertainment, Streaming & Gaming:

The pandemic has affected the entertainment and gaming industry positively. All these businesses have grown and consumers are utilizing their services/products more than before. These all are winners, for instance, Netflix, Amazon Prime Video, Disney, etc. 

3. Logistics & Delivery:

Besides the above, logistics and delivery businesses have also been in the rising stage. Ali Baba had his own ARM, which made 5 million transactions in China. It means they did 5 million delivery in a short span of time.

4. Video Conferencing:

Now, because all offices were closed due to this pandemic, Video conferencing grew very fast and is still growing. Webex, Skype, and Zoom are the platforms for conferences of people, digitally. People have stopped visiting hotels; conference halls and offices are shut down. People are working from home. This is a big reason that companies like Webex, Skype, and Zoom are able to grow their business.

5. Non-Cyclical Business:

Apart from this, those businesses are also growing that are in the part of the non-cyclical business. Non-cyclical means that there is no cycle when and how it will rise; It will grow on its own.

In other words, businesses in consumer essentials will always grow. Some of the basic non-cyclic business are:

• Toothpaste
• Soap
• Shampoo
• Grocery
• Cosmetics
• Alcohol

These all are a non-cyclical business or consumer essential business.

6. Pharmaceutical Business:

The demand for medicine is always in-elastic in any economy. Elastic means flexible and it always increases and decreases. But the pharmaceutical industry stays in-elastic in any country, for example, insulin. The customer with diabetes will always take it. Whether a recession occurs or not, but it will not impact on this business.

Loser Industries in this Pandemic

At the same time, there are many losers in Corona's time. Businesses who are in a complete loss, are shutting down their services for a while.

Many of the businesses are shutting down their services to cope up with the current situation. Here I am sharing the list of businesses that are facing major losses due to coronavirus.

In-Betweener Industries

In this pandemic, some in-betweeners are growing moderately such as banking, health care, education, and manufacturing sectors. These are all in-betweeners. They will either rise or fall.

Let us understand the situation of in-betweeners. Before this, you should understand and know about the post-crisis. After the coronavirus eradication, the question that will arise is "Can you be the part of faster adoption of new technology & new process?".

Are you able to adopt the new technology and new process for your business? The answers depend on how fast you can grow your business or you will struggle in an existing way.

Now, take a look at the second part:

How will be the economy of India after eradication?

Basically, the economy always depends on consumption. Consumption has fallen and it will continue to fall. 

Well, as per my research, India should take the long-term geopolitical advantage. Like, In America, elections are on the way, And if Trump again wins this election, then India can take long-term geopolitical advantage from this.

As we know, Trump has always referred coronavirus to the Chinese virus, due to its origin from China. Not just that, America is giving different statements against China and there is a blame game going between both countries. It can be profitable for developing countries like India in terms of business.

In the current scenario, the geographical and political relations of these two countries are deteriorating. If Trump again rules America, then there is a probability that American companies might not take services from China. Then India will have a long term opportunity. This is the geopolitical advantage that a country may take in such a situation.

India should also focus on the reduction of the expenses in this Pandemic. Every year, the income tax rebate is given which is always more than the previous year. India will face a reduction in the income from income tax will reduce in 2020. Chances will more be reduced in 2020. Many businesses are drowning right now. Due to more expenditure in this pandemic, the economy will go through a terrible change.

I do not understand what should I name this huge economic recession that is going to come. As far as I have studied about it, the only way to save the economy is high consumption.

Consumption | Consumption | Consumption

Let's understand the meaning of consumption. The consumption comes from personal disposable income. The more the consumption, the more people spend the money, only then the economy goes on. If you want to know more information about personal disposable income, you can read this article: "Disposable Personal Income | Definition, Calculation, & Example"

Whenever this type of tragedy comes, people always save their money due to which personal disposable income does not increase and the economic growth rate is reduced.

Areas of Improvement

• Export
• Foreign Investment
• Consumption

India needs to improve in the above three sectors to minimize their expense and maximize the liquidity in the marketplace. 

These three areas will play a major role to grow the economy. Always remember: plan for the best and prepare for the worst.