Impact of nationwide lockdown on economy

On March 24, 2020, Prime Minister Narendra Modi addressed the entire nation at 8 pm. He mentioned that India will be in 21 days lockdown, starting from midnight. Though this looks just as the demonetisation announcement, this time, it is to fight a far more dangerous threat than black money and corruption.This time we are fighting against a virus that has shown its impact in more than 150 nations. By no doubt, such threat needs a drastic measure as a lockdown. However, the lockdown and the virus threat will have some serious impact on Indian Economy.

Indian economy which was already under some pressure due to the problems like rising NPA was doing fairly good only because of the consumption drive of the nation. With this lockdown, the consumption will be seriously hurt. People would not be able to spend on things they earlier did for leisure like movies, dining out and shopping. Simply put, the discretionary spending will be at an all-time low in the coming quarters. This will have also some short-term impact on the GDP and stock markets alike.

This surely is a small price to pay for the safety of the people. Organisation for Economic Co-operation and Development (OECD) has lowered Indian GDP growth estimate for 2020 by 1 per cent. The stock markets all over the world already seem to start factoring such as slowdown in the aggregate world GDP growth with a steep downslide in all the major stock markets with Indian stock market being no exception. Perhaps, with the fear of virus fading away in near future, we will see a sharp rise in GDP as well as in the stock markets all over the world.