How Indian economy is doing after the COVID outbreak and the impact of the Russian Ukraine war on Global economy including India.

How India overcame Covid crises and Economy bounced back 

20 lac crore stimulus

Steps for MSME

◘  Collateral free loan of Rs 3 lakh crores for MSMEs — a move that'll enable 45 lakh units to restart work and save jobs.

◘  Rs 45,000 crore partial credit guarantee scheme 2.0 for NBFCs. The first 20% loss will be borne by the guarantor that is the government of India.

Migrants 

◘  Free food for migrants
For those migrants who don't have NFSA cards or state cards, 5 Kgs of wheat or rice per person and one kg channa per family per month for next two months to be provided and it will reach through the state governments. This will entail Rs 3,500 crore and is likely to benefit around 8 crore migrants.

◘ ONE NATION ONE RATION CARD

◘ Street Vendor

Special scheme for street vendors to avail Rs 5,000 crore loan facility. Will be given Rs 10,000 of working capital.

The government is extending Rs 30,000 crore additional capital emergency funds through NABARD for post-harvest Rabi and Kharif related activities for small and marginal farmers.

◘ iNFRASTRUCTURE

1. Logistics like cold storage and warehousing

2. Marine and inland fisheries

3. vaccination of livestock

4. Dairy infrastructure

◘ Economy facing industries

1. Commercialisation of coal mining to make India self-reliant. Steps will ensure 1 billion tons of coal by 2023-24

2. Defence manufacturing support for Atmanirbhar Bharat. FDI limit raised to 49%

3. MGNREGS: Additional funding of Rs 40,000 crore to the scheme over and above the Budgetary Estimate.

4. Covid-related debt to be excluded from definition of default under the IBC. No fresh insolvency for next one year

5. No fresh bankruptcy in next one year

 The months after the second Covid wave witnessed an ‘impressive’ recovery. India’s growth recovery has been led by investment push by the government, and gradual re-opening of the economy which facilitated the revival of economic activities. Structural shifts, such as digitisation and decarbonisation also provide tremendous investment opportunities. 

There have been two domestic and one external factors responsible for the revival. The external factor has been the global demand that fuelled the Indian exports. And the two domestic factors have been the speed of the vaccination drive and increase in household saving that aided the pent-up consumption post the second wave

6.28 lac crore package announced by FM in 2021

👉  Expansion of health care infra

👉  Tourism: Free Visa, Loan Guarantee scheme for tourism sector which was worst hit

👉  Exports National exports guarantee. It helps to provide cushion to credit worthiness of exporters for buyers

How India and Global facing economic slowdown and Inflation post Ukraine and Russia War 

World is witnessing inflation due to high commodities prices and energy prices due to war. After Covid, world is fighting inflation and central banks are increasing interest rates. Europe is worst affected and is in recession. 

 

India has used this adversity as an opportunity. Although Inflation is haunting India too but has increased imports of oil from Russia at discounted prices. Now imports stands at around 25% of total oil import

India has fared relatively well in controlling inflation. US and other developed economies are facing worst inflation in four decades

Steps taken by Indian Government To control inflation 

👉 Duty-free imports of crude soy and sunflower oil

👉 Limiting sugar exports

👉 Banning the export of wheat

👉 Excise duty cuts on petrol and diesel

👉 Export tax of 15% on some steel products from zero

👉 Govt slaps export tax on petrol, diesel; windfall tax on domestic crude oil

Services export opportunities, domestic demand potential, and its emergence as an attractive investment destination will help India post a strong economic growth this year.

"We expect India to grow by 7.1%–7.6% in FY22–23 and 6%–6.7% in FY23–24. This will ensure that India reigns as the world’s fastest-growing economy over the next few years, driving world growth even as several major economies brace themselves for a slowdown or possibly a recession" DELOITTE