Post-COVID-19 View of Indian Economy with Emphasis on Service Sector: A Regression Implementation

ABSTRACT

Introduction: The COVID-19 pandemic has been declared a virulent epidemic by many around the world as it has caused a state of lockdown in most parts of the globe, which besets a great economic impact on the world economy. In lieu of this crisis, it is important to comprehend and estimate the total loss in order to perform crisis management and mitigate the decimation of economy. Objectives: This study aims to estimate the impact from the perspective of the Indian economy, with special emphasis on the service sector. Since the service sector forms the most colossus and cardinal part of the Indian economy, this research estimates the potential decline in the GDP and employment contributions of the service sector and its various subsectors. Methods: It implements contemporary regression models to fulfill the mentioned objective by analyzing how the potential decline, as predicted by the IMF, in gross domestic product (GDP) will affect the service sectors and its various subsectors. This is accomplished in four stages (1) data selection and comprehension of the features dataset for each subsector, (2) understanding the co-dependency of various features, (3) using regression techniques to predict values, and (4) error calculation and results. Additionally, it also presents an elaborated and comprehensive explanation of the same, thereby suggesting some potential solutions to ameliorate the decline. Results: This research is a compendium of the aftereffects that the Indian economy will face post-COVID-19 breakdown. 1.The travel and tourism subsector faces a steep drop of 20.702%, while its employment contribution declines by 59.052%.2.Finance, real estate and business services sector’s contribution to GDP will see a gigantic drop of 20% in the first quarter, which will step down to 88.65% toward the last quarter of the coming economic year, while the sector’s contribution to employment will see an enormous decline of 98.96%.3.The contribution of trade, transportation, and communication undergoes a vast drop of 92.007% toward its GDP contribution, while its employment contribution has a hefty decline of 63.555%. Conclusion: This study explicitly evaluates and elaborates the economic perspective of the aftereffects of the pandemic across each of the major subsector category of the service sector of India for the fiscal year 2020–2021. It studies successfully and maps the impact of the pandemic on the Indian economy, thereby paving way to identify the solutions to mitigate the same. It also provides a set of preventive measures to address the issues identified. In future work, this study attempts to explore the social economic effects of the same in the post-COVID-19 world. © 2022, The Author(s), under exclusive license to Springer Nature Switzerland AG.