An analysis of the Indian Economy during the three COVID-19 pandemic waves
Abstract
The objective of the study was to examine the effects of the COVID-19 pandemic on India’s economy. The analysis focused on several economic metrics, including stock market prices, the rupee’s value in relation to the US dollar, economic activity, the unemployment rate, and the rate of inflation. Contrary to popular belief, the results demonstrate that during the first wave (25 March 2020 to 16 September 2020), the increasing number of cases had a beneficial influence on economic activity and a negative impact on the unemployment rate. The second wave, which lasted from 15 March 2021 to 17 July 2021, was considerably stronger and demonstrated how confirmed instances had a significant detrimental impact on inflation rates and stock values. Contrary to expectations, the third wave (December 28, 2021, to January 30, 2022) was found to be less intense. Overall, the report shows how the pandemic affected India’s economy during each of the three waves and notes that there have been encouraging signs of recovery during the return to normalcy phase. The government, scholars, policymakers, and economists will find this study useful in understanding how the COVID-19 Pandemic affected the Indian economy and in coming up with ideas for future risk mitigation measures.
First published online 26 August 2024
Keyword : economy, India, COVID-19, stock market, currency, unemployment
How to Cite
Baber, H., Shaik, M., & Gupta, H. (2024). An analysis of the Indian Economy during the three COVID-19 pandemic waves. Technological and Economic Development of Economy, 1-15. https://doi.org/10.3846/tede.2024.21872
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Aggarwal, M., Bamba, M., & Bansal, I. (2022). Empirical insights into COVID-19 impact on BSE sectoral returns. Thailand and The World Economy, 40(2), 127–144.
Albu, L. L., Preda, C. I., Lupu, R., Dobrotă, C. E., Călin, G. M., & Boghicevici, C. M. (2020). Estimates of dynamics of the COVID-19 pandemic and of its impact on the economy. Romanian Journal of Economic Forecasting, 23(2), 5–17. https://doi.org/10.55654/JFS.2021.5.9.02
Alpesh, L., & Parmar, G. (2020). Impact of COVID-19 on major vegetable markets of gujarat. Indian Journal of Economics and Development, 16(4), 648–655. https://doi.org/10.35716/IJED/20158
Ashraf, B. N. (2020). Stock markets’ reaction to COVID-19: Cases or fatalities? Research in International Business and Finance, 54, Article 101249. https://doi.org/10.1016/j.ribaf.2020.101249
Baber, H., & Tripati Rao, D. T. (2021). The price of the lockdown – the effects of social distancing on the Indian economy and business during the COVID-19 pandemic. Ekonomski horizonti, 23(1), 85–99. https://doi.org/10.5937/ekonhor2101085B
Behera, D. K., Sabreen, M., & Sharma, D. (2023). The impact of COVID-19 on the Indian economy. In J. Michie & M. Sheehan (Eds.), The political economy of COVID-19 (pp. 302–317). Routledge. https://doi.org/10.4324/9781003307440-20
Bhagawan, S., & Kumar, S. (2022). Impact of COVID-19 on NSE Sectoral Indices 1. Finance India, 36(1).
Bhama, V. (2022). Macroeconomic variables, COVID-19 and the Indian stock market performance. Investment Management & Financial Innovations, 19(3), Article 28. https://doi.org/10.21511/imfi.19(3).2022.03
Bhandari, B., Gupta, S., Sahu, A. K., & Urs, K. (2021). Business sentiments during India’s national lockdown: Lessons for second and potential third wave. Indian Economic Review, 56(2), 335–350. https://doi.org/10.1007/s41775-021-00121-w
Blustein, D. L., Duffy, R., Ferreira, J. A., Cohen-Scali, V., Cinamon, R. G., & Allan, B. A. (2020). Unemployment in the time of COVID-19: A research agenda. Journal of Vocational Behavior, 119, Article 103436. https://doi.org/10.1016/j.jvb.2020.103436
Brainerd, E., & Siegler, M. V. (2003). The economic effects of the 1918 influenza epidemic. SSRN.
Clemente-Suárez, V. J., Navarro-Jiménez, E., Moreno-Luna, L., Saavedra-Serrano, M. C., Jimenez, M., Simón, J. A., & Tornero-Aguilera, J. F. (2021). The impact of the COVID-19 pandemic on social, health, and economy. Sustainability, 13(11), Article 6314. https://doi.org/10.3390/su13116314
Deb, P., Furceri, D., Ostry, J. D., & Tawk, N. (2022). The economic effects of COVID-19 containment measures. Open Economies Review, 33(1), 1–32. https://doi.org/10.1007/s11079-021-09638-2
Debata, B., Patnaik, P., & Mishra, A. (2020). COVID‐19 pandemic! It’s impact on people, economy, and environment. Journal of Public Affairs, 20(4), Article e2372. https://doi.org/10.1002/pa.2372
Deshpande, A. (2022). The Covid-19 pandemic and gendered division of paid work, domestic chores and leisure: Evidence from India’s first wave. Economia Politica, 39(1), 75–100. https://doi.org/10.1007/s40888-021-00235-7
Elkhwesky, Z., Derhab, N., Elkhwesky, F. F. Y., Abuelhassan, A. E., & Hassan, H. (2023). Hotel employees’ knowledge of monkeypox’s source, symptoms, transmission, prevention, and treatment in Egypt. Travel Medicine and Infectious Disease, 53, Article 102574. https://doi.org/10.1016/j.tmaid.2023.102574
Farooq, H. Z., Davies, E., Brown, B., Whitfield, T., Tilston, P., McEwan, A., Birtles, A., O’Hara, R., Spencer, H., Hesketh, L., Ahmad, S., Guiver, M., & Machin, N. (2021). Real-world SARS CoV-2 testing in Northern England during the first wave of the COVID-19 pandemic. Journal of Infection, 83(1), 84–91. https://doi.org/10.1016/j.jinf.2021.04.013
Godman, B., Haque, M., Islam, S., Iqbal, S., Urmi, U. L., Kamal, Z. M., Shuvo, S. A., Rahman, A., Kamal, M., Haque, M., Jahan, I., Islam, Md Z., Hossain, M. M., Munzur -E-Murshid, Kumar, S., Charan, J., Bhatt, R., Dutta, S., Abhayanand, J. P., … Sefah, I. (2020). Rapid assessment of price instability and paucity of medicines and protection for COVID-19 across Asia: findings and public health implications for the future. Frontiers in Public Health, 8, Article 585832. https://doi.org/10.3389/fpubh.2020.585832
Gupta, H., & Gupta, A. (2023). Investor’s behaviour to COVID-19 vaccine: an event study on health and pharmaceutical sector in India. International Journal of Pharmaceutical and Healthcare Marketing, 17(4), 429–449. https://doi.org/10.1108/IJPHM-05-2022-0053
Haq, F., & Medhekar, A. (2022). The economic impact of COVID-19 on religious tourism to the Kartarpur Corridor. International Journal of Religious Tourism and Pilgrimage, 10(2), Article 6.
Hossain, M. (2021). The effect of the Covid-19 on sharing economy activities. Journal of Cleaner Production, 280, Article 124782. https://doi.org/10.1016/j.jclepro.2020.124782
Iftimie, S., López-Azcona, A. F., Vallverdú, I., Hernández-Flix, S., de Febrer, G., Parra, S., Hernández-Aguilera, A., Riu, F., Joven, J., Andreychuk, N., Baiges-Gaya, G., Ballester, F., Benavent, M., Burdeos, J., Català, A., Castañé, È., Castañé, H., Colom, J., Feliu, M., ... Castro, A. (2021). First and second waves of coronavirus disease-19: A comparative study in hospitalized patients in Reus, Spain. PloS One, 16(3), Article e0248029. https://doi.org/10.1371/journal.pone.0248029
Jain, S. (2021). Betas in the time of corona: A conditional CAPM approach using multivariate GARCH model for India. Managerial Finance, 48(2), 243–257. https://doi.org/10.1108/MF-05-2021-0226
Janiak, A., Machado, C., & Turén, J. (2021). Covid-19 contagion, economic activity and business reopening protocols. Journal of Economic Behavior & Organization, 182, 264–284. https://doi.org/10.1016/j.jebo.2020.12.016
Jesline, J., Romate, J., Rajkumar, E., & George, A. J. (2021). The plight of migrants during COVID-19 and the impact of circular migration in India: A systematic review. Humanities and Social Sciences Communications, 8(1). https://doi.org/10.1057/s41599-021-00915-6
Kar, S. K., Ransing, R., Arafat, S. Y., & Menon, V. (2021). Second wave of COVID-19 pandemic in India: Barriers to effective governmental response. EClinicalMedicine, 36. https://doi.org/10.1016/j.eclinm.2021.100915
Keogh-Brown, M. R., & Smith, R. D. (2008). The economic impact of SARS: How does the reality match the predictions? Health Policy, 88(1), 110–120. https://doi.org/10.1016/j.healthpol.2008.03.003
Lai, H., Khan, Y. A., Thaljaoui, A., Chammam, W., & Abbas, S. Z. (2021). COVID-19 pandemic and unemployment rate: A hybrid unemployment rate prediction approach for developed and developing countries of Asia. Soft Computing. https://doi.org/10.1007/s00500-021-05871-6
Lee, S., & Lee, D. K. (2018). What is the proper way to apply the multiple comparison test? Korean Journal of Anesthesiology, 71(5), Article 353. https://doi.org/10.4097/kja.d.18.00242
Mishra, A., & Sayeed, D. N. (2020). Covid-19 and migrant workers: Clinical psychologists’ viewpoints. In L. S. S. Manickam (Ed.), COVID-19 pandemic: Challenges and responses of psychologists from India (pp. 43–55). The Editor.
Mou, J. (2020). Research on the impact of COVID19 on global economy. IOP Conference Series: Earth and Environmental Science, 546, Article 032043. https://doi.org/10.1088/1755-1315/546/3/032043
Naik, D. M., & Haldankar, G. B. (2021). Impact assessment of first wave of Covid-19 pandemic on Goods and Services Tax (GST) revenue collection & distribution in India. Journal of Distribution Science, 19(10), 43–54.
Our World in Data. (n.d.). India: Coronavirus pandemic country profile. https://ourworldindata.org/coronavirus/country/india
Padhan, R., & Prabheesh, K. (2021). The economics of COVID-19 pandemic: A survey. Economic Analysis and Policy, 70, 220–237. https://doi.org/10.1016/j.eap.2021.02.012
Padmakumar, A., Patil, G. R., & Gadiya, K. (2022). Did mobility affect the spread of COVID-19 during the first pandemic wave? An investigation for Indian states using dynamic regression. Journal of Transportation Engineering, Part A: Systems, 148(9), Article 04022059. https://doi.org/10.1061/JTEPBS.0000707
Price-Haywood, E. G., Burton, J., Fort, D., & Seoane, L. (2020). Hospitalization and mortality among black patients and white patients with COVID-19. New England Journal of Medicine, 382(26), 2534–2543. https://doi.org/10.1056/NEJMsa2011686
Prusty, S., Anubha, & Gupta, S. (2021). On the road to recovery: The role of post-lockdown stimulus package. FIIB Business Review, 11(2), 206–224. https://doi.org/10.1177/23197145211013691
Reserve Bank of India. (2021). Annual Report, 2021. https://rbi.org.in/scripts/AnnualReportPublications.aspx?Id=1316
Seong, H., Hyun, H. J., Yun, J. G., Noh, J. Y., Cheong, H. J., Kim, W. J., & Song, J. Y. (2021). Comparison of the second and third waves of the COVID-19 pandemic in South Korea: Importance of early public health intervention. International Journal of Infectious Diseases, 104, 742–745. https://doi.org/10.1016/j.ijid.2021.02.004
Singh, A., Singh, J., & Ghosal, A. (2022, May 26–27). Impact of social media on stock market-a case of sentiment analysis using vader. In 2022 International Conference on Machine Learning, Big Data, Cloud and Parallel Computing (COM-IT-CON). IEEE. https://doi.org/10.1109/COM-IT-CON54601.2022.9850668
Shaik, M., Jamil, S. A., Hawaldar, I. T., Sahabuddin, M., Rabbani, M. R., & Atif, M. (2023). Impact of geo-political risk on stocks, oil, and gold returns during GFC, COVID-19, and Russian–Ukraine War. Cogent Economics & Finance, 11(1), Article 2190213. https://doi.org/10.1080/23322039.2023.2190213
Trading Economics. (n.d.). India unemployment rate. https://tradingeconomics.com/india/unemployment-rate
Wickramasinghe, K., & Naranpanawa, A. (2023). Tourism and COVID-19: An economy-wide assessment. Journal of Hospitality and Tourism Management, 55, 131–138. https://doi.org/10.1016/j.jhtm.2023.03.013
Albu, L. L., Preda, C. I., Lupu, R., Dobrotă, C. E., Călin, G. M., & Boghicevici, C. M. (2020). Estimates of dynamics of the COVID-19 pandemic and of its impact on the economy. Romanian Journal of Economic Forecasting, 23(2), 5–17. https://doi.org/10.55654/JFS.2021.5.9.02
Alpesh, L., & Parmar, G. (2020). Impact of COVID-19 on major vegetable markets of gujarat. Indian Journal of Economics and Development, 16(4), 648–655. https://doi.org/10.35716/IJED/20158
Ashraf, B. N. (2020). Stock markets’ reaction to COVID-19: Cases or fatalities? Research in International Business and Finance, 54, Article 101249. https://doi.org/10.1016/j.ribaf.2020.101249
Baber, H., & Tripati Rao, D. T. (2021). The price of the lockdown – the effects of social distancing on the Indian economy and business during the COVID-19 pandemic. Ekonomski horizonti, 23(1), 85–99. https://doi.org/10.5937/ekonhor2101085B
Behera, D. K., Sabreen, M., & Sharma, D. (2023). The impact of COVID-19 on the Indian economy. In J. Michie & M. Sheehan (Eds.), The political economy of COVID-19 (pp. 302–317). Routledge. https://doi.org/10.4324/9781003307440-20
Bhagawan, S., & Kumar, S. (2022). Impact of COVID-19 on NSE Sectoral Indices 1. Finance India, 36(1).
Bhama, V. (2022). Macroeconomic variables, COVID-19 and the Indian stock market performance. Investment Management & Financial Innovations, 19(3), Article 28. https://doi.org/10.21511/imfi.19(3).2022.03
Bhandari, B., Gupta, S., Sahu, A. K., & Urs, K. (2021). Business sentiments during India’s national lockdown: Lessons for second and potential third wave. Indian Economic Review, 56(2), 335–350. https://doi.org/10.1007/s41775-021-00121-w
Blustein, D. L., Duffy, R., Ferreira, J. A., Cohen-Scali, V., Cinamon, R. G., & Allan, B. A. (2020). Unemployment in the time of COVID-19: A research agenda. Journal of Vocational Behavior, 119, Article 103436. https://doi.org/10.1016/j.jvb.2020.103436
Brainerd, E., & Siegler, M. V. (2003). The economic effects of the 1918 influenza epidemic. SSRN.
Clemente-Suárez, V. J., Navarro-Jiménez, E., Moreno-Luna, L., Saavedra-Serrano, M. C., Jimenez, M., Simón, J. A., & Tornero-Aguilera, J. F. (2021). The impact of the COVID-19 pandemic on social, health, and economy. Sustainability, 13(11), Article 6314. https://doi.org/10.3390/su13116314
Deb, P., Furceri, D., Ostry, J. D., & Tawk, N. (2022). The economic effects of COVID-19 containment measures. Open Economies Review, 33(1), 1–32. https://doi.org/10.1007/s11079-021-09638-2
Debata, B., Patnaik, P., & Mishra, A. (2020). COVID‐19 pandemic! It’s impact on people, economy, and environment. Journal of Public Affairs, 20(4), Article e2372. https://doi.org/10.1002/pa.2372
Deshpande, A. (2022). The Covid-19 pandemic and gendered division of paid work, domestic chores and leisure: Evidence from India’s first wave. Economia Politica, 39(1), 75–100. https://doi.org/10.1007/s40888-021-00235-7
Elkhwesky, Z., Derhab, N., Elkhwesky, F. F. Y., Abuelhassan, A. E., & Hassan, H. (2023). Hotel employees’ knowledge of monkeypox’s source, symptoms, transmission, prevention, and treatment in Egypt. Travel Medicine and Infectious Disease, 53, Article 102574. https://doi.org/10.1016/j.tmaid.2023.102574
Farooq, H. Z., Davies, E., Brown, B., Whitfield, T., Tilston, P., McEwan, A., Birtles, A., O’Hara, R., Spencer, H., Hesketh, L., Ahmad, S., Guiver, M., & Machin, N. (2021). Real-world SARS CoV-2 testing in Northern England during the first wave of the COVID-19 pandemic. Journal of Infection, 83(1), 84–91. https://doi.org/10.1016/j.jinf.2021.04.013
Godman, B., Haque, M., Islam, S., Iqbal, S., Urmi, U. L., Kamal, Z. M., Shuvo, S. A., Rahman, A., Kamal, M., Haque, M., Jahan, I., Islam, Md Z., Hossain, M. M., Munzur -E-Murshid, Kumar, S., Charan, J., Bhatt, R., Dutta, S., Abhayanand, J. P., … Sefah, I. (2020). Rapid assessment of price instability and paucity of medicines and protection for COVID-19 across Asia: findings and public health implications for the future. Frontiers in Public Health, 8, Article 585832. https://doi.org/10.3389/fpubh.2020.585832
Gupta, H., & Gupta, A. (2023). Investor’s behaviour to COVID-19 vaccine: an event study on health and pharmaceutical sector in India. International Journal of Pharmaceutical and Healthcare Marketing, 17(4), 429–449. https://doi.org/10.1108/IJPHM-05-2022-0053
Haq, F., & Medhekar, A. (2022). The economic impact of COVID-19 on religious tourism to the Kartarpur Corridor. International Journal of Religious Tourism and Pilgrimage, 10(2), Article 6.
Hossain, M. (2021). The effect of the Covid-19 on sharing economy activities. Journal of Cleaner Production, 280, Article 124782. https://doi.org/10.1016/j.jclepro.2020.124782
Iftimie, S., López-Azcona, A. F., Vallverdú, I., Hernández-Flix, S., de Febrer, G., Parra, S., Hernández-Aguilera, A., Riu, F., Joven, J., Andreychuk, N., Baiges-Gaya, G., Ballester, F., Benavent, M., Burdeos, J., Català, A., Castañé, È., Castañé, H., Colom, J., Feliu, M., ... Castro, A. (2021). First and second waves of coronavirus disease-19: A comparative study in hospitalized patients in Reus, Spain. PloS One, 16(3), Article e0248029. https://doi.org/10.1371/journal.pone.0248029
Jain, S. (2021). Betas in the time of corona: A conditional CAPM approach using multivariate GARCH model for India. Managerial Finance, 48(2), 243–257. https://doi.org/10.1108/MF-05-2021-0226
Janiak, A., Machado, C., & Turén, J. (2021). Covid-19 contagion, economic activity and business reopening protocols. Journal of Economic Behavior & Organization, 182, 264–284. https://doi.org/10.1016/j.jebo.2020.12.016
Jesline, J., Romate, J., Rajkumar, E., & George, A. J. (2021). The plight of migrants during COVID-19 and the impact of circular migration in India: A systematic review. Humanities and Social Sciences Communications, 8(1). https://doi.org/10.1057/s41599-021-00915-6
Kar, S. K., Ransing, R., Arafat, S. Y., & Menon, V. (2021). Second wave of COVID-19 pandemic in India: Barriers to effective governmental response. EClinicalMedicine, 36. https://doi.org/10.1016/j.eclinm.2021.100915
Keogh-Brown, M. R., & Smith, R. D. (2008). The economic impact of SARS: How does the reality match the predictions? Health Policy, 88(1), 110–120. https://doi.org/10.1016/j.healthpol.2008.03.003
Lai, H., Khan, Y. A., Thaljaoui, A., Chammam, W., & Abbas, S. Z. (2021). COVID-19 pandemic and unemployment rate: A hybrid unemployment rate prediction approach for developed and developing countries of Asia. Soft Computing. https://doi.org/10.1007/s00500-021-05871-6
Lee, S., & Lee, D. K. (2018). What is the proper way to apply the multiple comparison test? Korean Journal of Anesthesiology, 71(5), Article 353. https://doi.org/10.4097/kja.d.18.00242
Mishra, A., & Sayeed, D. N. (2020). Covid-19 and migrant workers: Clinical psychologists’ viewpoints. In L. S. S. Manickam (Ed.), COVID-19 pandemic: Challenges and responses of psychologists from India (pp. 43–55). The Editor.
Mou, J. (2020). Research on the impact of COVID19 on global economy. IOP Conference Series: Earth and Environmental Science, 546, Article 032043. https://doi.org/10.1088/1755-1315/546/3/032043
Naik, D. M., & Haldankar, G. B. (2021). Impact assessment of first wave of Covid-19 pandemic on Goods and Services Tax (GST) revenue collection & distribution in India. Journal of Distribution Science, 19(10), 43–54.
Our World in Data. (n.d.). India: Coronavirus pandemic country profile. https://ourworldindata.org/coronavirus/country/india
Padhan, R., & Prabheesh, K. (2021). The economics of COVID-19 pandemic: A survey. Economic Analysis and Policy, 70, 220–237. https://doi.org/10.1016/j.eap.2021.02.012
Padmakumar, A., Patil, G. R., & Gadiya, K. (2022). Did mobility affect the spread of COVID-19 during the first pandemic wave? An investigation for Indian states using dynamic regression. Journal of Transportation Engineering, Part A: Systems, 148(9), Article 04022059. https://doi.org/10.1061/JTEPBS.0000707
Price-Haywood, E. G., Burton, J., Fort, D., & Seoane, L. (2020). Hospitalization and mortality among black patients and white patients with COVID-19. New England Journal of Medicine, 382(26), 2534–2543. https://doi.org/10.1056/NEJMsa2011686
Prusty, S., Anubha, & Gupta, S. (2021). On the road to recovery: The role of post-lockdown stimulus package. FIIB Business Review, 11(2), 206–224. https://doi.org/10.1177/23197145211013691
Reserve Bank of India. (2021). Annual Report, 2021. https://rbi.org.in/scripts/AnnualReportPublications.aspx?Id=1316
Seong, H., Hyun, H. J., Yun, J. G., Noh, J. Y., Cheong, H. J., Kim, W. J., & Song, J. Y. (2021). Comparison of the second and third waves of the COVID-19 pandemic in South Korea: Importance of early public health intervention. International Journal of Infectious Diseases, 104, 742–745. https://doi.org/10.1016/j.ijid.2021.02.004
Singh, A., Singh, J., & Ghosal, A. (2022, May 26–27). Impact of social media on stock market-a case of sentiment analysis using vader. In 2022 International Conference on Machine Learning, Big Data, Cloud and Parallel Computing (COM-IT-CON). IEEE. https://doi.org/10.1109/COM-IT-CON54601.2022.9850668
Shaik, M., Jamil, S. A., Hawaldar, I. T., Sahabuddin, M., Rabbani, M. R., & Atif, M. (2023). Impact of geo-political risk on stocks, oil, and gold returns during GFC, COVID-19, and Russian–Ukraine War. Cogent Economics & Finance, 11(1), Article 2190213. https://doi.org/10.1080/23322039.2023.2190213
Trading Economics. (n.d.). India unemployment rate. https://tradingeconomics.com/india/unemployment-rate
Wickramasinghe, K., & Naranpanawa, A. (2023). Tourism and COVID-19: An economy-wide assessment. Journal of Hospitality and Tourism Management, 55, 131–138. https://doi.org/10.1016/j.jhtm.2023.03.013