text: Indian economy I 100 days of lockdown: the economy then & now | Business News
  Updated Jul 02, 2020 | 20:43 IST
  The government has taken a number of steps to arrest the free-falling economy due to coronavirus lockdown but experts believe further strategic reforms are the need of the hour
  Rs 20 lakh crore package to revive economy
  RBI cut interest rates 115 bps since March
  Rural India likely to lead demand revival
  Mumbai: On March 25, Prime Minister Narendra Modi announced an unprecedented lockdown to combat the deadly Coronavirus outbreak. Overnight, the second-most populous country in the world came to a standstill. The growth engines across the country came to a grinding halt, thousands and thousands of migrant workers were rendered jobless and domestic consumption sank significantly, pushing Indian economy for the first contraction in more than 40 years. Unemployment soon soared to record high of 27.1 per cent by the first week of May.
  To stop the economy from crash-landing, Finance Minister Nirmala Sitharaman announced a slew of measures including a stimulus package claimed to be worth Rs 20 lakh crore or roughly 10 per cent of India's GDP.
  The steps included relief measures for migrant workers, MSME sector and well as the rural economy. Moreover, RBI too slashed key interest rates by 115 basis points to 4 per cent in order to boost liquidity in the system.
  Despite all these measures, the health of the economy is bleak in the short term. Last week, the International Monetary Fund (IMF) projected a sharp contraction in India's GDP outlook.
  IMF cut India's FY21 outlook to minus 4.5 per cent from 1.9 per cent it projected in April. Not only the IMF, several global ratings agencies including S&P and Fitch have also lowered India outlook.
  Experts believe further strategic reforms are the need of the hour to stem the fall in the economy. For example, the lockdown has laid bare the migrant worker issues in the country. Reports suggest migrant workers are hesitant to return to the cities as long as the virus is spreading. These concerns aggravate concerns of economic recovery.
  However, it's not all doom and gloom for India. In the last 100 days we have also witnessed the unimaginable - Crude touching record low levels. The fall in international oil prices helped Indian govt significantly cut the import bill, check inflation, and boost tax revenues, with almost none of those gains passed onto the consumer.
  Moreover, the staggered reopening of the economy has shown some revival in domestic consumption. Several businesses have witnessed sales going back to pre-covid levels on the back of pent up demand. FMCG companies, in particular, are reporting robust recovery
  Experts believe rural India may drive economic recovery amid Covid-19 crisis. Data on the rural front suggests agrochemicals, fertilizers and anything to do with the rural consumer discretionary items has been strong demand. Two-wheelers and tractors too have seen solid growth in the last 2-3 months. Analysts say a good monsoon will further drive up rural demand.
  So while, the economy has taken a beating since March 25, so has the rest of the world. The challenge is whether India will recover faster and use the crisis to undertake serious reform.