Four months after the novel virus initially made headlines, in the second week of March 2020, the World Health Organization (WHO) proclaimed the virus outbreak a pandemic due to the number of COVID-19 cases dangerously approaching 200,000. And the death toll surpassing 8,000 worldwide.  

Businesses worldwide include the Teer and Nagaland Lottery were functioning out of dread of an imminent collapse of the world financial system, with nearly 162 countries gradually sliding into lockdown. 

In addition to the previous year's slow economic growth, this circumstance is causing tremendous volatility in the market, particularly in developing nations like India. Let's examine the effects of the coronavirus on Indian companies and the ensuing tax revisions.

The Indian economy has seen better days, as evidenced by the rising rates of unemployment, interest rates, and fiscal deficit. The new coronavirus that is shaking Indian trade markets that rely on imports from China is adding gasoline to this inferno. 

 

The Economy of India Prior To COVID-19  

India's economic growth performance after 1947 was characterized by an average annual growth rate of roughly 3%. Only in the 1980s did the economy surpass this average yearly growth rate; on average, economic growth in the 1980s was 5.6% annually (Chandrasekhar and Ghosh, 2002). 

India started liberalizing its economy in 1991. The economy grew at a pace of 6.1% during the first ten years of economic reforms, from 1992–1993 and 2002–2003. This was only slightly faster than the growth rate for the 1980s (Reserve Bank of India, RBI, 2003).

By 2002–2003, the economy had entered its second phase of expansion. With the exception of the height of the global financial crisis, the economic growth rate (based on the base year of 2004–2005) increased to an average of 8% to 10% per quarter between 2003–2004 and 2011–2012 as a result of several fortunate national and international events and was mostly driven by a domestic credit boom. 

An array of macroeconomic indices, including the rate of savings and investment, the percentage of exports in the GDP, and domestic bank credit, lottery sambad ticket selling, all increased in tandem with this period of expansion. Even if they were slight, these gains in the macroeconomy were also reflected in people's living standards. 

Various Economic Sector After COVID-19

1) Components and Replacement Parts 

China is where India imports around 55% of its electronics. Because of the lockdown that followed the coronavirus epidemic, these imports have already decreased to 40%. India is contemplating the encouragement of domestic manufacturing as a countermeasure to lessen reliance on a single market. In addition, China is India's third-biggest export market for raw resources such as cotton, mineral fuels, and organic chemicals; therefore, a lockout between the two nations is likely to result in a significant trade deficit for India.

2) Travel 

India is a major destination for historical and cultural tourism, drawing visitors from all over the world year-round. The fact that foreign visitors account for a sizable portion of the verified COVID-19 cases in India is not shocking.

However, the entire tourism value chain—which includes lodging facilities, eateries, attractions, agents, and operators—is predicted to suffer losses of thousands of crores as a result of the suspension of visas and the indefinite closure of tourist sites. Based on expert analysis, the tourism sector is expected to suffer severely, potentially permanently damaging the industry going forward.

3) Medications 

India is quite concerned about the impact on the pharmaceutical business because 70% of its active pharmaceutical ingredients (API) are imported from China. Many of the nation's pharmaceutical manufacturing industries rely heavily on these active pharmaceutical components. Medication will be the top consumer demand as COVID-19 spreads quickly over India, and since there aren't nearly enough APIs to make medications, prices for subsequent merchants and the market as a whole are soaring. Just the costs of vitamins and penicillin have already increased by 50%.

4) Flying 

Airlines are reportedly under pressure after the Indian government canceled tourist visas indefinitely. For varied lengths of time, almost 600 foreign flights to and from India were canceled. Even on well-traveled local routes, airline fares have sharply dropped as a result of the approximately 90 domestic flight cancellations. To offset the increased operational costs, private airport operators have asked the government for permission to tack on a small passenger facilitation fee to airfares.  

Will the COVID-19 effect on the Indian economy be lessened by tax reduction or rate rationalization? 

Speaking on steps to mitigate the fast-spreading coronavirus's economic effects, International Monetary Fund Chief Economist Gita Gopinath stated that government officials would need to enact a significant focused budgetary plan. In order to help normalize the economic situation, she also offered advice on larger monetary stimulus and policy rate reductions. 

India's GST income collection is already in short supply, and the coronavirus scare may make things worse. The Government of India is taking its time implementing any significant policy changes or providing tax relief, as there are now less than 200 active COVID-19 cases out of a population of 1.33 billion. 

However, they have declared that the deadline for paying GST for FY 2018–19 will be extended till June 30, 2020. Additionally, India has postponed requiring e-invoicing until October 1, 2020. 

The learning curve: Organizations can learn from any crisis, and this epidemic is showing to be a particularly instructive one. This is how businesses are deciding what to do next. 

Working remotely: Organizations are forced to review their business continuity and contingency strategies in light of the shutdown of major cities. Many organizations have implemented a "work from home" drill employing essential resources in order to determine whether remote working circumstances are feasible, following the confirmation of the first COVID-19 case in India. 

Nevertheless, there are drawbacks to remote working as well. For example, industries such as manufacturing, hospitality, or retail are unable to use remote working, thus they are forced to deal with business disruption. 

Conclusion: 

Similar to India, many other global economies are realizing the dangers of being unduly reliant on a single market. CXOs of Indian multinational corporations, who recently attended the Confederation of Indian Industry (CII) annual meeting, see the current state of affairs as a teaching opportunity and feel that India can capitalize on this by looking at domestic manufacturing of goods and increasing the country's Made in India campaign. India hopes to take up to 40% of their competitors' market share.