The virus which emerged from China’s Wuhan city during the month of December-2019 and spread across the world had not only devastating effects on the health of the people but also shattered the economies of the world. The virus entered J&K on 20th April, when the first cases of virus was reported. From then onwards, it is spreading at a quick pace in J & K, with Kashmir seeing more cases than Jammu. Talking about the economic effects of lockdown, it brought the whole world on its knees, developing countries and third world countries the most. The pandemic devastated the economic health of the whole world. The global growth is predicted to drop down from 3.3% to -3%, falling by -6.3% for the year 2020 (IMF). Indian growth is predicted to be 1.9% while earlier it was 5.8%. From an economist’s point of view, the economic effects of the disease vary across economies according to the severity of virus, economic condition, sectoral composition and duration of the pandemic. The UT of Jammu and Kashmir is expected to receive effects in very diverse forms. The economy of the UT which accounts for the 0.77% of India’s total GDP is suffering a loss of 270 crores daily due to COVID-19 lockdown. The agriculture sector is contributing 16% To the GDP of UT and providing employment to 60% of population.
The sector is expected to have least effects as it is not a much busy season, although the demand for the yield is expected to be very low and is going to hit the prices of agricultural products in the upcoming time. The industrial sector which is hard hit by the lockdown has a share of 27.8% in the state in terms of output. The services sector which is the major contributor to the GDP of UT, contributing 56% is also hard stricken. Tourism sector which contributes 6.98% to the GDP of UT is also facing its worst. The pandemic is expected to hit the economy very hard as the major two sectors (in terms of output) are suffering the most. The WHO recently issued a statement stating that COVID-19 may take years to end and we need to learn to live with it. Keeping in view the above facts, the pandemic is likely to create lot of economic problems if not controlled as well as handled properly by the people concerned, be they doctors or be the economic planners. It is in the interest of the UT to keep a close eye on the economic situation and try to bring economic activities back to life in the areas which are least risk prone, like small scale business units and come up with a plan for other areas and sectors, so economy can be kept alive while fighting the pandemic. Apart from these, some steps are expected to be taken by the central govt. and RBI in the form of expansionary fiscal policies and monetary stimulus to bring the economy on the path of revival.
Aamir Ahmad Teeli is a Research Scholar in Economics