Corona is having negative effects on the economy worldwide, with an expected GDP loss around 9 trillion dollars. India has also been impacted on a large scale with an experienced 2.5% loss in GDP which could go up to 4%.
The fourth largest sector of economy in India is the FMCG ( fast moving consumer goods) sector and hence a major cause of concern, as it has also experienced a downfall. Reasons confirmed so far tell that majority of supply chain is at a stand still. This is majorly because raw material procurement is a problem amidst the ongoing lockdown situation. Also, the industries are not working at full capacity due to less workforce and in the fear of unsold stocks as the markets have crashed, lately. Dropped sales have also posed a big challenge. All this has resulted into a liquidation problem, being witnessed on a large scale.
Recovery rates foreseen are not very relieving. Expected recovery graphs for essentials are V- shaped that is pace at which demand falls due to disruption by pandemic, i.e. the pace at which liquidity crunch has happened is equal to pace of recovery. However, the luxury items like chocolates and shampoos are expected to have a U shaped recovery. This in simple words means that only after things start falling into place, some recovery can be expected.