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Two years from now, Covid-19 will still be spoken about, and we are all aware of its effects on our personal and professional lives. Lockdowns were implemented all around the nation, which had a significant negative impact on Indian enterprises and the economy.
On the one hand, some enterprises managed to withstand the impact by working remotely; tiny businesses, however, were permanently shut down. India's economy had its worst performance, and its GDP sank to shallow levels. Sadly, the pandemic had a much harsher effect on businesses and the Indian economy.
Let's talk about the primary sector; it contributes nearly one-sixth of the Indian national income and employs almost 50% of the workforce. There was a significant decline in production in most of the states in India, and few had no change or surprisingly increased production. The primary reason for the decrease in production was the lack of availability of labor and machines, the need for social distancing, and restrictions on the free movement of men and machinery.
The country has also witnessed many migrant laborers attempting to return to their native places, significantly impacting the labor supply in some states.
About 53% of companies in the manufacturing sector reported that the pandemic had a very high impact and that 73% of their order amounts had significantly decreased. This affects India since many consumer goods, as well as many raw materials, intermediates, and components utilized by firms there, originate in China. However, as businesses looked for production possibilities outside of China, this pandemic gave India a significant chance to improve its manufacturing skills. Manufacturing is a significant employer as well. According to estimates, every new job in the manufacturing sector generates two to three positions in the service sector.
Since they cannot operate remotely like most enterprises in the service industry, the secondary sector is one of the most impacted. Only a few sectors, including FMCG and pharmaceuticals, reported rising revenues, while others saw declines.
Since China is India's primary provider of raw materials and other items, we must establish partnerships with other supplier nations. India must also create a new manufacturing strategy where the full value chain, not just completed items, is produced to protect its production facilities from problems arising in other nations.
Over 50% of India's gross domestic product comes from the services sector (GDP). Many service industry firms have stopped operating or have witnessed a sharp loss in business. This will continue until they get used to the new business method. Sectors including education, health care, and tourism have had a direct impact due to the people's engagement in providing the services being restricted or eliminated. Due to the government's constraints, the E-Commerce platform was only permitted to function with a few limitations, allowing it only to provide the borrower's essential items. As a result, service providers entered the market and improved their offerings, supplying contactless delivery to clients at their doorsteps. These actions have caused a sharp rise in e-payments that reached billion-dollar levels in the months following the initial lockdowns. By adjusting to the pandemic's changes, a select few businesses from many industries have experienced tremendous development in their operations.
FDI inflows into India's services sector surged strongly by 34 percent annually from April to September 2020 to reach US$ 23.6 billion, notwithstanding the observed global disruptions. Despite the Covid-19 outbreak, the Indian startup sector has been developing well as of September 7, 2022. There are 107 unicorns in India. The backbone of the Indian economy, small firms, have suffered the most due to their narrow profit margins and inadequate liquidity. Already, small enterprises have tight profit margins. Their sales were negatively impacted by the lockdown that followed COVID-19. As a result of declining profits, small firms' ability to obtain financing will suffer, making their long-standing liquidity issue much worse. Small firms will find it tough to satisfy daily demands and execute existing and new orders when creditworthiness and liquidity are under strain. Many small businesses digitized their day-to-day operations, which has helped them reduce costs and boost competitiveness.
The fast-moving and unanticipated effects of COVID-19 left many already-established crisis strategies and teams unprepared. But companies can benefit from the COVID-19 disruption by taking the correct lessons from the outbreak and enhancing their resilience for the next disaster.
The virus has permanently altered the workforce. However, what experiences and working models do your people want in the future? And how can you make these goals consistent with the goals and strategy of your company? Many MNCs conduct surveys and take into account employee feedback.
So what has changed after the pandemic?
The fastest-growing trend is digitization, aided by rising consumer acceptance and the use of digital services and goods. Due to the pandemic's complicated issues, the government, startups, universities, and civil society have all worked together on multi-sector efforts. Incentives and policies were offered as part of the Indian government's support package for the MSME sector to facilitate the localization of specific industries. Since the pandemic-related stress has undermined the productivity of business owners, the pandemic has also boosted awareness of mental health issues in several nations.
-Sai Shreyas Ravva
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