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Short Case Studies, Industry/Sector Analysis, Business Strategy, Blue Ocean Strategy, Innovation, Cloud Computing, Outsourcing Industry.
Friday, September 8, 2023
Apple's Blue Ocean Strategy: Navigating Innovation with Purpose
Wednesday, April 26, 2023
Friday, December 25, 2020
Pandemic Impact or COVID-19 Impact on Indian Economy
The
COVID-19 pandemic started to rise in India from the month of July post the
lockdown lifted the government. Confirmed cases, Recoveries & Deaths also
increased monthly. Government despite launching wide promotional campaign about
social distance, wearing masks & sanitizer usage, numbers kept growing.
The
consumer price inflation fell even before pandemic started and flattened between
5.5% - 5.90% & rose in the month of November to close to 7%. Supply chain
disruptions due to lock down restrictions in different states had led to increase
in inflation and November inflation is attributed to pent up demand.
GDP Growth% also declined during the pandemic and worsened further in Q3 2021 due to lockdown where factories were shutdown and labour moved to their native places. Trade restrictions on China also created raw material shortages and manufacturing went down.
Government launched Atmanirbhar Bharat campaign and announced PLI Scheme for companies that set up new manufacturing facilities and increase production domestically.
The long term Atmanirbhar strategy will not be significant in the short term. Moving production from China to India is a difficult task and its success relies on many geo political factors.
Economic
activity came to a grinding halt in the country. The lockdown had devastating
impacts on an already slowing economy and people’s livelihoods as shops,
eateries, factories, transport, services and business establishments were
shuttered. India’s GDP was on a downward slope much before the COVID-19 pandemic
hit the country, largely due to the demonetisation exercise, and the botched-up
implementation of the Goods and Services Tax (GST) that paralysed the
cash-dominated informal sector and small businesses.
RBI
Monetary Policy – COVID-19
The RBI is maintaining the accommodative stance
since February 2019 MPC meeting. An accommodative
stance means that there is room for lowering of interest rates in the future to
revive growth and demand in the economy. The MPC has decided to continue with
this stance “at least during the current financial year and into the next
financial year – to revive growth on a durable basis and mitigate the impact of
COVID19 on the economy while ensuring that inflation remains within the target
going forward.” Even as the central government and the central bank have worked
for hand in hand to revive the economy and provide financial support, the
economy still recovering from the covid-19 impact with rising cases. Therefore RBI decided to remain status quo on
the rates and await inflationary pressures to ease before it takes any action
to fuel growth. RBI requires more headroom to deal with policy measures.
Government Policy
Most of relief measures are
indirect support such as credit guarantees and liquidity infusion that proved
to be ineffective in generating higher credit growth. The credit offtake from
banks will remain subdued in the near term because of low credit demand.
Even if the health crisis is managed by mid-2021, the economic recovery will be
slow and uneven with adverse consequences on output, employment and financial
stability. The discretionary spending on non-essential goods has declined
drastically due to rising unemployment and worries about likely job losses in
the future. The pandemic has exposed the vulnerability of India’s public
healthcare system. India’s public healthcare system is one of the
most underfunded in the world. India’s public expenditure on health is less
than 2% of its GDP.