How Can Effective Vaccination Help Boost The Indian Economy?
COVID-19 has single-handedly brought the global economy to its knees.
As economies were beginning to recover from the shock and impact of the 1st wave, the 2nd wave broke out in India.
Amidst such a chaotic situation, it is normal for businesses to feel helpless. Many experts are of the opinion that in terms of magnitude, COVID-19 beats the 2008 global financial crisis.
Then again, with rapid vaccine rollouts and active inoculation drives on the horizon, there is a glimmer of hope for entrepreneurs after all.
So far, economists seem to be divided on how effective vaccination could be for the immunity of our health and wealth. However, there is not an iota of doubt regarding its role in restoring a semblance of normalcy.
That said, let us glance through ways in which an effective vaccination drive can restore our economy’s health.
Vaccination And Economic Drive
Some researchers have touted the economic condition of 2020 to be worse than what it was during the Great Depressions.
As the number of infected patients surged at an unprecedented rate, the medical infrastructure failed to cope up with the situation.
Accordingly, as an impact of stringent lockdown measures and a slowing economy, the unemployment rate in India stood at a strong 7.8%. This has impacted almost all sectors of our economy and across all lines of work.
Take, for instance, the service sector. It contributes around 50% to India’s GDP. As the cases of infection continue to soar, employees infected with the virus and otherwise are forced to stay away from offices. Few segments are either halting work altogether, while others are instituting remote work to that end.
It is slowing down this entire sector significantly.
Sectors like education, travel, and tourism presently face the brunt of COVID-induced restrictions and are yet to bounce back on their feet. These sectors are responsible for creating plenty of job opportunities and are now the primary victims of consumption decline and job losses.
At this point, the best way to stimulate the operation of these sectors is through prompt vaccination of large groups of people involved in them, that too within a short span.
It could help people join the workforce again and, in turn, improve economic activities.
Now that vaccines developed by pharmaceutical giants like Bharat Biotech, Oxford-AstraZeneca, R-Pharm, and Pfizer are out in the market, the government aims to vaccinate all citizens by December 2021.
However, it could be a smarter move if the government prioritises the vaccination of the vulnerable population and regions to streamline the roundabouts.
On the whole, if implemented successfully, the timely inoculation drive could boost the share market significantly.
Direct Impact Of Vaccine Generation
Fast vaccine generation and distribution are going to catapult the revenue of pharmaceutical firms. Meanwhile, the process of selling and distributing them will generate business for other sectors as well.
For example, those involved in plastic, syringes, rubber, glass vials, transportation, or refrigeration businesses will enjoy steady demand as the mass generation of vaccines continues to soar.
MSMEs and entrepreneurs involved in the supply chain of businesses can streamline their operations as more capital flows through increased demand and supply.
Fortunately, start-ups and small businesses willing to ride the surge in demand for these products and services have access to several fintech platforms like KredX to satiate their capital requirements.
Having prompt access to such financing means has helped entrepreneurs keep their operations continuous and ramp up their production to cater to soaring demand. In this scenario, it is further expected that these businesses will increase their consumption with more economic activities, which, in turn, would boost liquidity in the economy.
Indirect Impact Of Vaccine Generation
As vaccines will be made available to a larger part of the population, the fear of infection, keeping people cooped up inside their homes, will slowly subside as well.
As a result, pandemic-induced restrictions will be relaxed, and the hospitality and entertainment business will be back on the path of recovery.
Simultaneously, it will also inject life into the stock market.
A country that is back to scaling its pre-pandemic levels will draw the attention of foreign investors to boost India’s share market and foreign direct investment.
Since a lot depends on upcoming vaccination drives, it is safe to say that vaccine rollout could be the turning point we have been waiting for with bated breath.
However, we should note that a successful vaccination drive will not heal our economy overnight.
Indeed, the path of recovery is going to be laborious, but there is plenty of hope that, in due course, we will be able to pull our economy up from the despair it is battling at the moment.