Various sectors of the economy have been deeply impacted by the outbreak of the novel coronavirus. Even with the 21 days lockdown coming to an end, there seems to be no sign of improvement and the country is leery of the extensions of the lockdown. The article aims at providing a window to the havoc unleashed by the virus on the service sector. 


The service sector is a dominant sector in the Indian economy, contributing more than half of the total GDP. India’s services sector covers a wide variety of activities such as trade, hotel and restaurants, transport, storage and communication, financing, insurance, real estate, business services, community, social and personal services, and services associated with construction. The sector has contributed 54.17 per cent of India’s Gross Value Added at current price in 2018-19. India’s services sector GVA grew at a CAGR of 6.96 per cent to US$ 1,356.49 billion in FY19 from US$ 846.84 billion in FY12. Net export estimate from April to November 2019 in services is US$ 142.02 billion and import is US$ 89.24 billion.



Insurance companies have to bear a major brunt of the stoppage of the activities due to lockdown. Life insurance companies have to face the burden of falling stock prices and increased mortality rates.

According to a press release from the Life Insurance Council, “The Council also confirmed that the clause of ‘Force Majeure’ will not apply in case of COVID-19 death claims. Force majeure clause is basically a clause for unforeseen circumstances which renders an insurance contract null or invalid, for the situations like natural disasters, war or war like situations, etc., as the insurance companies cannot plan for them in advance. However, this clause will not be applicable for death claims related to coronavirus to ensure that insurance companies stand with the customers in gloomy times.

Further, big airlines and large hospitality chains, which are the worst affected sectors during this time, protect their assets and business operations with insurance policies. Moreover, cancellation of various social events and postponement of large sports events like the Olympic games have also added to their losses. According to an estimate, the insured cost of the games stood at $2 billion including TV rights and sponsorship, plus $600 million for hospitality.

However, pressure has also been mounting up due to undue advantage being taken by some of the insured as many hospitals are overcharging insurance claims by sub-optimally utilizing their resources, overbilling on use of Personal Protective Equipment. Travel insurance companies are also facing payout pressures due to cancellation of policies.

Government needs to come out with some regulations for treatment costs or the insurance companies would not be able to sustain the pressure.



The cascading effect of the coronavirus (Covid 19) pandemic will cost the Indian hospitality industry losses to the tune of ₹620 crore. The Indian standalone and chain hotel segment has over 1.4 lakh rooms which accounts for only 5 per cent in the hotel industry segment.

According to the report, the overall loss of total revenue for the around 140,000 branded/organised hotel rooms across the country will be anywhere between ₹130-155 crores. This amounts to 27-32 % erosion in the overall revenue as compared to last year.

Casual workers and contracted workers make up approximately 25% of the hotel staff and these are the first ones to be laid off. Cancellation of business events, stoppage of transportation services and reduced footfalls of tourists are the reasons why the hospitality sector has come to such a standstill.

However, some hotels in Bangkok have started lending out their rooms to businessmen who need space for their office work. Moreover, various hotels have tied up with the governments to convert their spaces into quarantine wards for the treatment of COVID-19 patients. OYO ROOMS is one such example. It has also launched an “OYO partner support program” in Japan to attract the hotels in Japan to connect with its platform. Under this program, OYO will be compensating those hotels for the loss in revenues by paying a proportionate amount of revenue earned by them in the previous year.



The lockdown has led to a surge in the television and streaming viewership. Self-isolation and quarantine are resulting in increased media consumption in the home in the form of entertainment services such as video-on-demand and gaming. 

However, With TV shows and sports being called off, streaming service providers are facing a glut of content to provide their viewers. Streaming service providers are fearful that this glut of content, along with the looming threat of a recession ahead, might cause their users to opt themselves out of their streaming subscriptions. The tectonic shift, as a result of mass unsubscriptions, may lead to job losses and eroding profit margins/ revenue for OTT streaming companies. With the cancellation of shows, it may lead to glut even when the outbreak subsides.

Sports streaming used to provide multi-billion advertising dollars to streaming businesses. The coronavirus has led to the cancellation/ suspension of most major leagues and tournaments globally. Severe losses are occurring for streaming service providers who used to rely on sports streaming for both advertisement money as well as subscriptions from sports fans.

In order to fill the gaps created by cancellation of shootings, many channels are resorting to old shows like the telecast of Indian epics Mahabharata and Ramayana has led to a huge surge in the viewership of DD channels. However, the question is whether the platforms like NETFLIX which has built a reputation of adding new content to its library almost on a weekly basis will be able to hold on its subscribers if it fails to add new content?

However, the problem of OTT platforms are not only restricted to content. The telecom companies have called on the video streaming service providers to temporarily migrate from HD (hi-definition) to SD (standard definition) streaming, and even dispense with heavy bandwidth-consuming advertisements and pop-ups to ease network load. This exercise is crucial as telecoms infrastructure is needed for various critical needs, including online education, digital payments and online healthcare amid various government advisories calling on people to operate from home to check the spread of the pandemic.



The coronavirus outbreak has impacted both financial markets and consumer sentiments; and with the ongoing liquidity concerns and lockdown situations it seems there’s more trouble brewing for financial institutions.

However various measures have been taken by RBI and commercial banks in order to keep on the floatation of funds in the market. RBI has loosened its monetary policy. Banks are working tirelessly to make the online transfers of funds announce under various welfare schemes by the government. Bank workers are being called in shifts in order to maintain social distancing. ATM operations are being continued with proper safeguards.

In order to promote digital transactions various tutorials can be circulated online. Banks can also enhance their current digital offerings, for example, they can increase the limit for online activities and can simplify the procedure to reset passwords.


The pandemic has deeply impacted service sector. It has led to disruption of many services, causing many companies to go belly-up. However, essential services are trying to maintain the pace with the rising demand. Collaboration among various sectors and industries is the only way to overpower this invisible enemy.