Realigning the Indian economy post COVID-19 era

A look into the indigenous model and problems at different sectors.


The purpose of this paper is to provide a glimpse of the economic pain caused by COVID-19 which can be felt all over the world. The virus has brought a halt in our lives due to stern lockdowns and other measures to curb its spread; it has adversely affected the livelihood & lifestyle of many around the world. Even if covid-19 does not cross the scale of pandemics compared to the past, the economic problems it leads to seem like more of a problem than the virus itself.

In the paper we will be discussing about the effect of COVID-19 on India and the different sectors of the economy and the role the government plays in reviving the economy. We will also discuss the ‘swadeshi’ idea of Mahatma Gandhi in brief and look into the idea of glocal today and how the new indigenous approach will be beneficial for the Indian economy.

Here, we have used conceptual, empirical & descriptive research methodology to understand the different aspects and the data used are secondary in nature. Also, some of the examples and information found in the paper are from personal experience. We will conclude the paper by trying to shed light on and understand what the era post – covid-19 would look like for India.


There is no denying that the spread of COVID-19 has hit the economy and the basic lifestyle of people all around the world, it has brought a ‘still’ that could not have been imagined otherwise in a world competing in a rat-race driven by needs and demands. The virus was declared as a pandemic by the WHO on 11th of March 2020 since then extensive measures have been taken to contain the spread worldwide and find a vaccine. In October 2019, there was a meeting – “Event201”conducted by ‘The Johns Hopkins Center For Health’ with ‘World Economic Forum & The Bill Gates and Melinda Gates Foundation’ here an exercise was conducted to understand the response needed if there was an outbreak of pandemic, the event stimulated a discussion based on the concept of outbreak of a novel virus for which there is no antidotes available, in the meet ideas on precautions and other aspects were discussed. With the increase in number of confirmed cases we have taken up a single strategy of lock down all over the world under the influence of developed countries and individuals.

Even a country like India, having a population of around 1.36 billion and famous for not adhering to rules came to a sudden halt on the 24th of March 2020 when our honorable Prime Minister Shri Narendra Modi declared a nationwide lockdown to contain the spread of the Covid-19 virus.

As we are well aware the lock down were introduced in phases as per the requirements of the time. Currently we are in the fifth phase where there is partial lockdown in the nation i.e., in contaminated zones there is full lockdown whereas other zones are given a lot of slacks. According to WHO, in its ‘Covid -19 situation report – 156, India had 456,183 number of confirmed cases whereas the number of confirmed cases globally was 9,129,146.

Due to the presence of asymptomatic individuals the spread would continue as the virus transmission occurs with coughing, sneezing and even from normally talking to and  breathing the same air as an infected person (in short, air borne transfer). Therefore,   regardless of the steps taken to contain the flow of virus, we must keep this in mind and aim to better our health for the future as Covid-19 like any other viral infection will linger    in the environment.

India and COVID -19

India in wake of Covid-19 has been given a fast-track support of $1 billion approved by    the World Bank’s board of executive directors, for India’s Covid-19 Emergency Response and Health Systems Preparedness Project.

This is to help India’s response towards the spread of the virus; this is the largest health  care support to India from the bank. “The World Bank is working in close partnership with the government of India to provide urgent and flexible support to the country as it fights the spread of Covid-19” (World Bank Country Director for India; JunaidAhmad).

Covid is not just a problem of health sector it also has severe (both good and bad) social, economical and political implications and we as citizens and active participants of this game of “Viral fear” have been experiencing it, the fear has brought about many changes  in the lifestyle of people in India, following are few things that have drastically changed over the course of five phases of lock down –

  • People are more conscious of their health
  • Online consumption has increased
  • The Platform for education is changing
  • Consumption of media and communication sectors has increased
  • The pandemic has become more of an infodemic
  • Fear has lead to many drastic measures taken by individuals in a situation where everything could have been controlled
  • Work from home has become a new norm
  • Fake news have been trending and people are believing it
  • A new wave of individual patriotism
  • Economical changes, &
  • Series of political ups and downs etc.



According to the International Monetary Fund (IMF), the global impact of the pandemic of 2020 could be “much more” worse than the financial crises of 2008 and it is estimated that the world economy will face a contraction of 3% in its ‘global GDP (Gross Domestic Product)’. This is comparatively way more than the contraction of 1.7% n the year 2009 (just after the financial crises).

Some of the economic issues faced by India (& world too) under the impact of covid-19 are –

  • Increased level of unemployment (around 3o million people filed for unemployment benefit n US, and around 1 million in UK filed for such benefits).
  • Oil price had crashed couple of months into the world-wide lockdown as people are restrained inside and there are no inter or intra travel going on.
  • There is a risk of recession hovering over world economy.
  • Worldwide the travel industry has taken a severe hit.
  • Productions have been stopped to curb the spread of the virus.
  • Domestic GDP of many countries are ready to take a hit.
  • The problem of health shocks and health facility/ care is of big concern for many countries.
  • India is facing an economical crunch in its MESEs (Mini- Small- Medium Enterprises).
  • In India about 83% of the work forced is employed in the unorganized/ informal sector, they have no contracts, paid leaves or security and benefits enjoyed in the organized/ formal sectors, they have been facing issues with the spread of the virus, 40 crore workers to be unemployed from this sector, estimate by the International Labour Organization (ILO).
  • The farmers have faced a decline in demand and price for their products, as sales were not possible during lockdown.
  • Restrictions on tourism will lead to fall in government revenue.
  • The service sectors are also falling back as their so no work.
  • Stock market suffered at first due to uncertainty of the market amidst rising tension regarding the virus.
  • As per the estimations of WEO India’s growth can dip to 1.9% in 2020 (but rebound to 7.4% in 2021).


 Agriculture or the primary sector has been of crucial importance to the Indian economy since decades, at present it caters to around 49% of India’s livelihood needs and   contributes to about 17.4% of the country’s GDP. It is the largest unorganized sector in  the economy and employs around 90% of the total unorganized labour force of the country.   

 Agriculture sector amidst the lockdown has not been affected as much as other sectors, “The country’s farm sector is functioning smoothly despite COVID-19 lockdown and there will not be much impact on its growth in the current fiscal unlike other sectors”  (Agriculture Minister – Narendra Singh Tomar).

Regardless, there have been few repercussions and immediate challenges faced by the sector amidst lockdown to curb the spread of the coivd-19 virus, some of these challenges were & are –

  • The lockdown continues but the Rabi season has reached its peak, i.e. the time to be harvested, but the farmers face shortage of labour, transportation and shortage of equipments needed for harvesting due to restrictions imposed all over the country,
    • Perishable primary products like – dairy, fruits, fish etc face the problem of transportation and going bad,
    • Reaching the ‘mandis’ (the market) has been a concern & difficulty for farmers,
    • In last couple of months the weather has been erratic and inconsistent leading to a need to protect the harvest,
    • Small & medium industries depended on agricultural sectors also need a revival or this can affect the source of income for the primary sector labour,
    •  Due to time and space restrictions amidst lockdown farmers could not procure their desired price, and many have been protesting regarding the situation.
    • The main ‘mandis’ sold goods even at a low price of Rs. 2 or 3 per kilograms, just so that they do not have to take it back and let it rot or go to waste.


The secondary sector of the Indian economy contributes to about 28% of India’s GDP and employs 14% of the total work force available in the Indian market. This sector is mainly concerned with manufacturing, business, & enterprises etc.

The economic problems faced by the sector have been more severe, as there is no demand, leading to loss, unemployment; many MSMEs are on verge of closing down etc. some of the challenges faced in this sector are –

  • Industries and enterprises were closed to curb the spread of covid-19 virus due to which production graph declined,
    • Production of essential goods have increased and other goods have been sidelined,
    • Demand for goods have decreased due to uncertainty in the market and fear of cash crunch among the people,
    • Paying and maintaining employees has been difficult for micro, small and medium enterprises as some of them do not even have enough to keep themselves afloat.
    • There has been delay in payments leading to delay in salary, or there are no salaries at all in some cases,
    • Auto sector, building & constructions,  shipping, textiles industries are some of the industries that are facing challenges due to trade restrictions (restricted mobility), global recession, lack of demand, & lack of labour supply etc.
    • MSME (mini- small- medium enterprises),  have been the one’s facing the repercussions of lockdown badly as many of them are not registered, are so small that they do not cross the rim to fill GST, they depend more on informal loans than on formal etc. are reasons that even with repeated efforts there is so little impact,
    • There has been an increase in unemployment as daily wage earners have lost their jobs  due to lockdown, the informal sector has been the most ill- affected sector of the economy,
    • The players of the secondary sector may be self-sufficient enough to somehow work their way through 2-3 months of lockdown (even if just moderately), the real problem is the uncertainty and increase in time period lockdown and no availability of work even in un-lockdown, in an survey, only 7% of small and medium industries accepted they can survive more than 3 months of lockdown with their business closed,
    •  Poverty traps are estimated for 400 million workers (informal sector) in the Indian economy,
    • Work from home has become very popular, but this work from home is applicable only to those who enjoy the benefits of being in the organized sector and have access to the needed resources, otherwise this is a bane instead of a boon,
    • People are migrating from the place they worked to their native place as they have no work and every labour sees the opportunity to work in the fields in his native area, this has been a reason for increased transmission and heated political debates      in the country.


The tertiary or the service sector contributes to almost 59% of the total GDP and 23% of the total workforce. The service sector include services like – transportation & communication, education/schools, health services, entertainment, restaurants, hotels, tourism services, call centers, internet, information & media etc.     

In current crises the service sectors also face the blow of slowdown, some of the challenges faced by the service sectors are –

  • As corona virus spread it pulled the service sector into contraction “The IHS Market India Services Business Activity Index” came to 49.3 in March, from 85-month high of 57.5 till February,
  • Due to nationwide lockdown and the concept of social distancing, transportation has been a difficult task and hence revenue of railways, airways and local bus, rickshaw and auto drivers have been affected,
  • There are no services required in restaurants & hotels as there is lockdown and no available guests,
  • The tourism industry has faced heavy losses due to lockdown as people cannot travel,
  • Entertainment industry has faced a lack of work and new contents as films and episodes are not updated regularly, but online entertainment apps like Amazon, Netflix, YouTube, & Telegram etc saw a hike in usage,
  • Keeping in mind the lockdown, call centers have been not working and many enterprises took to online complaining systems,
  • Health sector has been facing many problems regarding – infrastructure and resources to combat the increasing number of confirmed cases. The number of ICUs, ventilators, beds, isolation wards etc have been in shortage compared to their need,
  • Education has shifted online, but many teachers are losing their jobs at schools, are not getting paid their salaries,
  • Also, the shift of education to online may be a boon to kids with resources, but what about those who cannot afford all the resources at the required time, what will they do? The main concern is that India has 40% of its population in the age group of 1-14 years, if they do not have proper means to keep themselves busy and involved, we may be looking at our next crises.


Aspect/ aspectEconomical & political aspectOther aspects
1.Governments plan to set up 20- lakh retail shop called – Suraksha stores all over India for providing essentials.A relief package of 1.70 lakh corer was announced by the finance minister – Nirmala Sitharaman.Introduction of the Aarogya Setu app to counter the spread and inform people amidst the lockdown.
2.About 20 corer women having ‘Jan dhan account’ revived Rs.  500 each.Under the ‘Building and Construction Workers Fund’, financial support of Rs. 3,066 Crore was provided.Aadhaar and pan linking deadline was extended so that people could exercise social distancing.
3.Wages under MGNREGA was increased from Rs. 182 to Rs. 202.Rs. 18,000 corer in tax refund to individuals & businesses was released.Union Human Resources Development Minister with YUKTI launched web portal to monitor initiative by the ministry.
4.Under Ujjawala Scheme free LPG to poor women.Introduction of Atmanirbhar Bharat and the idea of going glocal.50,000 made in India ventilators to fight covid
5.Help for farmers amidst Lockdown under the “PM – KISAN schemeGarib kalyan rojghar abhiyaan to boost employment and opportunities for migrant workers returning to villages.5kgsof wheat/rice &1 kg of pulses every month (April -June) to 800 million poor.
6.For people earning below 15,000 a month, government to pay 24% of their monthly wages that paid for pensions and provident funds.Loans repayment were frozen for three months (no default)50 lakh insurance cover for the health workers fighting Covid


  • Government introduced Rs.3 lakh crore collateral-free loans for businesses & MSME’s,
  • 20,000 crore and 50,000 crore as subordinate debt for stressed MSEM’s & equity infusions for MSEM’s respectively,
  • Global tenders of up to 200 crores were disallowed, i.e. only Indian companies can take that tender and they won’t have to compete with foreign companies,
  • Increased the rate of social security pension  from RS.850 to 1000 for widows and disabled persons,
  • Union cabinet decided to set up a Rs.15,000 crore fund for Animal Husbandry Infrastructure Development,
  • Cash reserve ratio was reduced to 3% from 4%.
  • Limit of collateral free lending to be increased from Rs 10 to Rs 20 lakhs for Women Self Help Groups supporting 6.85 crore households,
  • 25 lakh new Kisan Credit Cards sanctioned with a loan limit of Rs. 25,000 crore,
  • Support of Rs. 4,200 crore provided under Rural Infrastructure Development Fund to States during March, 2020 for rural infrastructure
  • Technology driven Systems – Online Education during COVID – SWAYAM PRABHA DTH channels to support and reach those who do not have access to the internet, 3 channels were already earmarked for school education; now another 12 channels to be added. Also provisions made for telecast of live interactive sessions on these channels with experts from home through Skype


When we talk of indigenous models the first person to come to mind is M. Gandhi regardless of him being more of a political & spiritual leader then an economist, the ideas that he propounded can be found in his work – books, speeches, writings etc. Life cannot be segregated in impermeable compartments as a result every aspect of life is  related be it social, emotional, economical, political or religious hence his ideas are general in concept.    

“Gandhi did not believe in any definite scheme of economic thought, to him, economics was a part of a way of life and hence his ideas are part of his general philosophy of life” (T.N. Hajela, 17th edition: 928). If we look at the work of Gandhi, his ideas are mainly  based on the concept of – Non-violence, Swadesh & Swadeshi. He believed that, “poverty among the masses was the consequence of taking a different approach in life with respect to the idea of Swadeshi”.                   


Basically Gandhi ji supported “Swadeshi” we can see it in his political and economical views. Therefore, we can say that even he was in favor of going ‘GLOCAL’ way before Independence.

He realized that the strengthening and revival of indigenous industries can            burn the shackles of colonization, economic and social problems faced by India.

Swadeshi according to him was the root principle for establishing ahimsa, Gandhi advocated that one who follows the spirit of swadeshi should use only things that are produced by our immediate neighbors and serve those industries by making them    efficient, and strengthen them in areas where they are found deficient. (Siby K. Joseph, understanding Gandhi’s vision of swadeshi).

To him swadeshi meant attaining self-sufficiency which would increase the employment of people by encouraging industries in villages. He found Khadi and the spinning wheel to be the ultimate product to promote the idea of being Swadeshi in the nation. It was a movement to boycott foreign made goods and use/ promote or give preference to local product even if they are of lower quality or of higher price. His idea being based on ahimsa also did not advocate of having unruly intentions towards other commodities imported. According to his ideas when implemented, will help the community by fulfilling the needs of every one as each village would be serving its neighboring village in the areas where they are deficient, that way –

  • each village will be able to sustain themselves,
  • no situation of oligopoly will persist in the economy,
  • the economy would be decentralized and income would be distributed fairly,
  • there would be harmony between production, consumption and distribution,
  • environmental hazards would be reduced, and
  • India would become self- sufficient and self- reliant. etc.


The term ‘Glocal’ was first introduced around the 1980s, it integrates the features of global and local, glocalizaton helps in presenting a global idea with the local niche. It can be defined as, “providing a global offer (brand, idea, product, service etc.), while taking local related issues into account” (The concept of glocalization and its incorporation in global brands’ marketing strategies Adriana Grigorescu, Alexandra Zaif: 72)

The concept of glocal in India has become very famous amongst the population during the period of lockdown; its fame can be called a mixture of feeling of patriotism and disbelief towards China.

The need to embrace glocal became strong when our PM gave the call for Atmanirbhar (self – reliant) Bharat, under which there are five pillars namely,

  • Economy
  • Infrastructure
  • System
  • Vibrant demography and
  • Demand

Under the movement a package of 20 lakh crores has been sanctioned which will fulfill the needs of MSMEs, labours, middle class, industries etc. this idea of self-reliant India focuses on – “becoming vocal for our local product & making them global”.

The ‘self – reliant movement’ amidst Covid-19 is also provided with a momentum, support (backed or given a base) by the old ideas, schemes and movements of the government like – ‘Make in India’, ‘Start up India’, ‘Ayushman Bharat’, & ‘Ujjwala scheme’ etc. It is also aided by the rising movement against the Chinese products that we are experiencing in the society and the economy after Covid-19 etc.

Under the indigenous model of – Atmanirbhar Bharat, the government is aiming at the following aspects –

  • Financing facility of RS. 1,00,000 crore for funding agriculture infrastructure will be given too different agricultural societies and organizations,
  • Rs 10,000 crores scheme for formalization of Micro Food Enterprises (MFE),
  • Enhancing our stand on production of defense related goods (this will reduce the trade bills),
  • Up gradation of policy and infrastructure at the industrial level,
  • Self reliance in coal production through policy reforms of including private sector participation, i.e. competitions,
  •  Rs 40,000 crores increase in allocation for MGNREGS to provide employment boost,
  • Establish research reactor in PPP mode for production of medical isotopes – promote welfare of humanity through affordable treatment for cancer and other diseases,
  • Establish facilities in PPP mode to use irradiation technology for food preservation – to compliment agricultural reforms and assist farmers,
  •  Link India’s robust start-up ecosystem to nuclear sector – Technology Development cum Incubation Centers will be set up for fostering synergy between research facilities and tech-entrepreneurs,
  • Private sector to be allowed to use ISRO facilities and other relevant assets to improve their capacities, etc.

Overall, the indigenous model just aims at making India self-reliant in all aspect and sectors of the economy, this movement will help the economy by rejuvenating it and motivating even the private sectors to pitch in and improve the economy and its flow. This will also motivate budding – entrepreneurs to go vocal for local goods and if that happens India’s development would be unstoppable as it houses some of the great talents in the world. Also with the people against the Chinese products & its influence in the economy the need for home-made goods will increase this will create a larger work base in the home country and make us self- reliant in aspects other than agriculture, & factories, it will help us attain a foothold even in the digital marketplace as producers and not only as consumers, as we know, now -a -days ‘data’ is considered as the new oil and we need to make our self productive enough in that area so that we do not face any problems in the future.


The Indian government has been trying its best to cushion the blows of the economic shocks due to changes in the system over the period of lockdown due to covid-19 virus spread. It has invested a lot in its economy and is planning a self sustained country, if India succeeds in that, it will recover and see a boom, and some of the reasons for such recovery would be –

  • India has got its stock market back on track, its showing upward trend even during the period of lockdown,
  • India as a country has enough momentum that it can run even after the engines are closed for a while,
  • The consumption level inside the economy is so vast that India does not need to depend too much on its export to full fill its basic needs and wants,
  • If India works on its indigenous models, and sets up its own production unit for defense related products it will have to incur less amount of trade bills,
  • Analyzing the current situations, war (even at a small scale) seems to be approaching. Therefore, if India can take its stand as a producer of arms and weaponries it can earn revenue from there in the coming future,
  • It is spending hefty amounts on development of infrastructure in different sectors, which will increase the growth if each sector,
  • Agricultural sector can help us get back on feet, according to a member of the Niti Aayog – Ramesh Chand, the growth rate estimated for the 2020-21 fiscal deficit of this sector regardless of the current situation is around 3%. He also added – “If you look at growth rate of 3.7 per cent in current price level, then growth rate comes to 11.3 per cent, which is 60 per cent more than the growth rate of the non-agriculture sector”.


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I hereby declare that this piece of written work is the result of my own independent scholarly work, and that in all cases material from the work of others (in books, articles, essays, dissertations, and on the internet) is acknowledged, and quotations and paraphrases are clearly indicated. No material other than that listed has been used. This written work has not been previously or not yet been published.

Article by:- Shraddha Sharma

© Copyright reserved Alysane Society

© Copyright reserved Shraddha Sharma

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