Bringing great changes

After the Coronavirus outbreak started from Wuhan, China, the world environment is cleaning up across the globe due to lock down. The pollution level in busy cities of China, India and many countries around the world decreased to a considerable level. It was not less than a miracle when the capital city Delhi received showers during lockdown and significant drop in mercury, resulting in a cloudless blue sky. Thousands of birds have been seen in Peru & Auga Dulce beach of Italy. The municipality authorities are busy in the process of cleaning & sanitization of the places, localities and other establishments in order to stop the spread of deadly virus. These developments can be seen as a natural instrumental measures of Global Cleanup Mission.  We have seen when the gold prices achieve new heights suddenly prices fall down. We have also seen the sensex – BSE & NSE – showing increasing trend in consecutive days or months abruptly falls down to the record low, then bounce back. As per the accounting book the Asset Liability Management, Liquidity & Regulatory rules is used by the authorities at the helm of affairs to maintain a desirable level of financial health of a particular organization or a country. To regulate the finance for the overall Global Economic impact on the people around the world the natural calamities and pandemic cases play an important role. Coronavirus is less deadly than virus like Ebola & SARS but much higher communicable disease may have more capacity to spread on community level. To control the rise & fall of fast growing economic forums or developed countries the nature is acting as a regulator. From historical point of view, at many occasions the global economy crashed by virtue of natural disasters, epidemic or world war incidents. The Coronovirus and SARS (Severe Acute Respiratory Syndrome) are believed to be from the same family of virus that usually infect animals but can sometimes spread to humans as well. The SARS outbreak in 2003 appeared from same China and spread worldwide within a few weeks. The SARS leads to a total GDP loss of $US 54 billion, affected the economy of China, Philippines, Malaysia, Singapore, Taiwan and Hong Kong countries. Despite the catastrophic impact of infectious diseases such as malaria, the epidemics has been under researched in economics. Taking into account pre-COVID 19 outbreak the developed countries such as USA, China and European Countries were considered the main supply chains and economic regulating authorities. The consumption of the imports from China will experience a sharp temporary drop as seen during 2003 SARS outbreak. The rising role of China in global market to supply commodities & raw material for manufacturing units is evident. The increasing business terms between different countries pushing further their respective economic target to achieve new heights were received a major set back by the outbreak. The global GDP growth is projected to drop to 2.4% in 2020 because of uncertain results of projections and may pick up later in the year.

Though China is claiming recovery, but will not save its position as the world’s largest exporter and second largest importer. As per the figures India economy will be least affected by the epidemic mainly because of timely decision of lockdown and more effective response from the general public. The efforts are on to minimize the collateral damage and speed up the recovery process so that human resource could be saved.

By the innovative measures in the recent Union Budget 2020 on SMEs the projects like “Make in India” & “Start Ups” will get a huge boost to overcome the set back on manufacturing, services, IT, shipping, pharmaceuticals, automobiles, mobiles, electronics, textiles etc. The World Bank is going to support India by providing $1 billion emergency financial support to prevent, detect and respond to the COVID 19 pandemic. The financial support spread over the states & UTs will definitely improve the healthcare structure of the country at par with other countries across the globe. The uncertainty of annual Haj pilgrimage to the holy cities of Makkah & Madina will have negative impact on Saudi Arabia’s revenue generation amid significant investment in infrastructure projects. Similarly, USA is at the top list of countries facing human losses by the deadly virus may have large consequences on their economic growth trajectory.

Figures clearly indicate that there is no significant increase in GDP (world) in the year 2020 as expected but showing a decline in coming days due to the adverse consequences of the epidemic. It also reflects the disruption of global supply chain and weak demand of imported goods shall remain for a complete financial year or so. Though the negative economic impact of Covid 19 is much severe when compared to other various virus outbreak due to the fact that main sufferers could be MSMEs. The Micro, Small and Medium enterprises have low cushion to tackle. These companies are considered as backbone of economy of any country and could sustain the shock by extending tax concessions, GST written off, and easy access to credit like initiatives. As we have seen that world bodies like WHO are actively monitoring the developments by the outbreak on each passing day by circulating advisory and providing financial aid. Hence, we can say that in the process of cleaning world atmosphere there is also a natural step for economic restructuring.