Normative analysis of the impact of Covid-19 on prominent sectors of Indian economy by using ARCH Model

Covid-19 has adversely affected all the nations and all the sectors of all nations. However,
the effect of the same on all the sectors of the economy need not be uniform. Moreover, the severity
of impact need not be the same across consequent waves. Knowing the severity of the impact across
the waves as well as across the time periods shall be quite useful for the purpose of policy
formulation. ARCH modelling helps us to gauge the intensity of shocks sustained across the sectors
through heteroscedasticity which can be read as a proxy for shock. To understand the severity of
shock across the sectors, the share value of the prominent companies across the sectors have been
taken as a proxy for their performance. Evaluating the severity of shocks across the sectors shall
help the government to note which sector needs greater support so as to create conducive fiscal and
monetary initiatives to enable the economy to achieve the state of normality. This paper is designed
to bridge the aforementioned research gap.