COVID-19: Economic Hardship and Financial Distress in Indian Economy
Abstract
As per the reports of the Union Nations Conference on Trade and Development (UNTCAD), the economy of developing countries like India and China would face fewer instances of recession. There is an urgent need to accumulate recourses to accelerate the rate of growth of the economy. COVID-19 is surely going to affect all the sectors of the economy, but the rate of impact is something that can be seen shortly. The government is framing fiscal and monetary policies keeping in view the challenges faced by people across the nation. Banking institutions are working to overcome the financial crunch faced by the economy by framing policies such as lower rates of interest on loans, subsidies to the health sector, etc. The paper accompanies the key recommendations taken up by important sectors of the economy and some instances of what will happen beyond COVID-19 in the future. It has been viewed that even after COVID-19 people will prefer to have less outside food and maintain hygiene in every place of work and they will continue to wear masks and wash hands to stay healthy. It is also expected that there will be lesser public gatherings as people will shift to the digital world and they will adopt a healthy lifestyle to increase immunity that will help them to fight any virus in the future.
... The precautionary measure of lockdown undertaken by several governments worldwide led to a drastic influence on the capital markets of the nation's [5,10,22,28,31,43]. [13] undertook a study on the Australian Stock Market during the period of the pandemic, the quantile regression methods were employed to witness the dramatic influence of COVID 19 on global fiscal markets. ...
... The government has taken various steps to improve the present condition of the healthcare sector by framing policies such as the National Health Policy 2017 focused on plummeting infant mortality rate and providing access to good quality healthcare services to the people of the nation. The current situation in the country is alarming and the COVID-19 pandemic had forced nations to rethink the present health care infrastructure as the government alone will not be able to cope up with the present situation (Jain & Lamba, 2020). It need support from the big industrialists to fasten the process of developing the infrastructure for the COVID-19 patients. ...
Cybersecurity is not just about fortification of data. It has wide implications such as maintaining safety, privacy, integrity, and trust of the patients in the healthcare sector. This study methodically reviews the need for cybersecurity amid digital transformation with the help of emerging technologies and focuses on the application and incorporation of blockchain and the internet of things (IoT) to ensure cybersecurity in the well-being of the business. It was found in the study that worldwide, advanced technology has been used in managing the flow of data and information, India should focus on maintaining the same IT-enabled infrastructure to reduce causalities in the nation and on the other hand improve administration, privacy, and security in the hospital sector. Depending on the network system, resource allocation, and mobile devices, there is a need to prioritize the resources and efforts in the era of digitalization.
In the present learning, an effort has been made to study the impact of independent variables such as total confirmed cases, new confirmed cases, total death cases, and new death cases on the stock prices of NIFTY-50 the leading Indian stock market index. The secondary data for the period from 1st January 2020 to 31st August 2021 for COVID 19 daily total confirmed cases, new confirmed cases, total death cases, and new death cases have been collected from the website and the data for the stock prices for NIFTY-50 has been collected from the website. It was found that every independent variable importantly the confirmed covid cases and death rates undertook in the study have impacted the stock volatility of NIFTY 50. The application of RSI exhibited that stock prices entered the oversold zone in March 2020 since then, Indian stock markets have been in an optimistic rally from October 2020 to August 2021. The results of the study will be beneficial for investors in the future, as the stock market is dynamic and variables impacting stock returns should be studied to predict the fluctuations in the stock prices.
Purpose
This paper aims to show the pragmatic studies that examine whether novel COVID-19 affects the national and international stock markets and reinforces the existing literature by highlighting the factors that are resultant from COVID 19.
Design/methodology/approach
The systematic literature review and bibliometric approach have been used in the study covering 585 selected articles published in journals of high repute from January 2020 to January 2022. The process of bibliometric analysis has been divided into three stages, namely, assembling, arranging and assessing. From the Scopus database, one of the most reliable and authentic database total of 585 records were collected, out of which 12 were specifically focused on communities, and information gathered in the comma-separated value documents design was compared and interpreted based on year, document types, subject area, country and research fields with the help of graphs and pie charts. The study has analyzed fact-based and reliable studies to draw inferences from existing literature regarding the pandemic impacting the financial markets. In the extant study, an attempt has been made to explore the factors that are resultant from the COVID-19 pandemic and affects the stock market performance, which can be further classified into a few common factors by using factor analysis.
Findings
It originated from the majority of the studies that the stock market retorted destructively to the upsurge in the figure of COVID-19 cases and fatalities. It also emphasized that the market has reacted differently in comparison to earlier catastrophes such as the great depression of 2008 and the Spanish flu. Various factors such as fear of losing capital, standstill economy, lower valuation, increased mortality rate, halt in business operations, retrenchment, trade war, liquidity issues, panic buying and selling, digitalization, negative media coverage, government interference, financial behavior of investors, hoarding of COVID supplies, promotion of start-up in health-care and education sector, news bulletins, prevention campaigns, use of medical devices and COVID-19 vaccination, etc. have been conferred from the studies that have an immediate consequence on the actions of investors in the stock market. It was further highlighted in the study that the Indian stock market has been less explored in respect of implications of COVID-19 contagion as the majority of studies were based on either international stock exchanges or combinations of varied nation’s stock markets. It was witnessed in the interpretation section that the number of studies is increasing at a fast pace as new variants of COVID-19 are emerging over time. Significant contribution has been done in enhancing the literature on COVID-19 and the stock market by China and the USA. The maximum contribution in this domain has been done in the form of articles in the present literature. Few studies were focusing on communities, so the present study will try to fill this research gap to some extent.
Research limitations/implications
This conceptual paper is demarcated by unsatisfactory analyses of writings from multi-discipline to get a comprehensive scope of notional understanding. Furthermore, there is a perchance that some other imperative phenomena or variables that prejudiced trading bustle have not been captured by present reviews of research papers. The influences of other macroeconomic variables should be explored to understand the concrete results of this pandemic.
Practical implications
Most of the studies were based on foreign stock exchanges, so there is an opportunity to explore the Indian stock market concerning the implications of the coronavirus pandemic. In the literature, it was examined that short-term studies have been undertaken, which cannot determine the long-term implications of COVID-19. Over time, besides COVID-19, various other factors have started impacting the stock market, so it has become difficult to examine the influence of COVID-19 on the stock market in isolation.
Social implications
The study will be helpful for future learnings in the arena of the stock market as it provides vast exposure to the present literature related to the impact of COVID-19 on economic markets. On the other hand, investors will also become aware of factors that are resultant of COVID-19 and will take the right decisions to save their investments in light of pandemic implications. The extensive review of studies will also help enterprising communities to take judicial steps to remain active in the period of economic slowdown.
Originality/value
The paper provides significant implications to the investors in the stock market, and it will provide useful insight to improve their returns on their portfolios. The learning from the study will help investors to take fruitful decisions considering the uncertainty during the pandemic period. The inferences drawn from rich existing literature will be guiding enterprises to take timely actions to avoid the situation of loss in the market and adapt new models to ensure continuity of business operations. Different markets had reacted differently, so investors need to be cautious before taking trading decisions.
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