context:-

currently India is facing dual shock

a) CoVID-19

b) Financial & economic slow-down

 

The supply and Demand shock:

  • China CoVID-19 lock down has created Global China Centered supply chain disruption.
  • There is also affect on Demand as lot of sectors got hit.

    eg: Tourism. travel etc

  • Rising Infections is Europe and US is big concern:Because these are service Driven Economies so,drop in      consumption has affect World.

Global Spill over of CoVID-19

  •  Hitting economies air waves: affects china supply, companies working at full capacity.
  • Hits on Travel & Tourism till June.
  • Demand is Us & Europe remains low.
  • Global GDP to remain low is 1st Half.

What is the Impact on India?

Economic will get hit:

  • India is not on the China-centered country But has almost 14 % of Imports
  • Slow down is International and domestic travel tourism
  • social distancing will also affect the retail sales.
  • Indirect effects of weaves Global Demands and low confidence
  • GDP Growth is to get slow-down and expected to be at 4-5%.

Impact on Domestic sector: -

a) Spill over effect of Yes bank.

b) fallout of the Shadow banking slowdown.

 

Way forward :

a) optimal policy to tackle covid-19

b) Liquidity easing and policy accommodation

 

conclusion:

  • Economically Impact is mainly due to week domestic balance sheet.
  • We need to take care of credits Risk and the Prioritizing of financial stability
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