The negative impact of COVID-19 on Indian IT businesses5 min read

 Pragati Goyal

Historical Background:




COVID-19 is the official name given to the disease caused by the most popular ailment in the current scenario named as coronavirus. This virus enlarged due to consumption of the animals by the people of Wuhan, China. The animals include fish, chicken and especially bats which are the main reason for the transformation of this virus. The symptoms of this disease are fever, dry cough, cold and weakness. Though the disease is acquainted contemporary and very detrimental which can cause death has no antivirus medicine available which is also the reason for the increase in the number of deaths. This disease has been compassed in more than hundred countries and more than 9, 55,136 cases are reported in which 48,578 people have been dead, the number is increasing every day and there are so many people are under treatment. Due to this disease, many countries have restricted the moving of the people in their state and from there state too. The disease has not only affected human life but also the economy of the countries. Most of the states ordered to dismiss all their works and postponed that, schools, colleges, government offices are closed till 15th March. And due to lockdown the economy also gets affecting and the IT has been dropping continuously. The disease had not only to have a negative impact on human life but also on the economy of countries such as India, etc.and on major IT businesses as well.

Read also: INDIA INC: RELIEF MEASURES TO RESCUE ECONOMY ANNOUNCED BY GOVERNMENT OF INDIA, RBI NOT ENOUGH

Current Issue:

The country is already experiencing a slowdown in growth. In the third quarter of the current fiscal, the economy grew at 4.7 per cent, slowest in six-year. 

 A significant 53 per cent of Indian businesses indicate the marked impact of the coronavirus rampant on business operations even at early stages, Federation of Indian Chambers of commerce and industry (FICCI). The rampant has significantly impacted the cash flow at organizations with almost 80 per cent reporting a decrease in cash flow, the survey showed.

 “Besides the direct impact on demand and supply of goods and services, businesses are also facing reduced cash flows due to slowing economic activity, which in turn is having an impact on all payments including to those for employees, interest, loan repayments and taxes,” it said.

 It said a combination of monetary, fiscal and financial market measures is needed to help the businesses and people cope with the crisis. “The Reserve Bank of India (RBI) needs to support the Indian industry and economy at this juncture by bringing down the cost of funds further through a reduction in policy rates. Banks should be given the flexibility to reschedule payment terms without the need for provisioning. With the corporate bond and commercial paper, markets are facing liquidity challenges, so the RBI should negotiate either directly or indirectly to ensure adequate flow of funds in the market. The government should not cut its capital expenditure plans despite any shortfall in tax collection” it said. The disease had not only to have a negative impact on human life but also on the economy of countries such as India, etc.and on major IT businesses as well.

Question of Law:

This disease is lay-outing very sprightly that it is harder for us to terminate from spreading and even when we don’t have antivirus medicines. The many critics said that China is playing a game with the whole world by spreading this disease deliberately, but we can’t say anything in the absence of any evidence or valid grounds. Here it is mandatory to observe that people throughout the world are suffering the most. And secondly, there is a need to combat from this situation as soon as possible because there may be a shortage of food and finance in the country which would lead to another revolution in India. If the lockdown would be continued for more time then there would be no work and without work, there would be no food. The disease had not only to have a negative impact on human life but also on the economy of countries such as India, etc.and on major IT businesses as well.

Conclusion:

In this situation where everyone is facing the same problem, there is a need to take precautions so that the disease can be controlled and not to lose hope and patience. On the one hand, India is facing dropping of income tax which was the major financial source for the government. On the other hand, there is no surety that all will go well after 15th April, the dates could be extended, so we have to look for the further actions of the government. Here we can conclude that no doubt the ailment is not minute, it is life taking disease, the need is to cooperate and we have to see for the integrative medicine would be made by the specialist who would save the human life or we have to suffer for more time. The disease had not only to have a negative impact on human life but also on the economy of countries such as India, etc.and on major IT businesses as well.

Read also: RECORDS ACROSS JURISDICTIONS MUST TO PREVENT TAX DISPUTES

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