“Every crisis comes with an opportunity”
Nothing has been able to stop it, be it distance of thousands of miles across the seas or strong borders including the great-wall of China. What an arsenal of nuclear missiles could not do, a novel virus of 0.06 microns size has done. Spreading across the globe, impacting the entire humanity and changing the world, forever. In absence of proven vaccine or medicine, the only possible antidote is to contain the virus by complete lockdown ranging from full curfew to running of only essential services. Making “cure is worse than the disease” not a mere phrase that we have read in text books but a lifetime experience for all of us. Beyond direct health related impact of COVID 19, the economic fallout of lockdown will not only be severe, but also be unprecedented in many ways due to first time happening scenarios like complete halt of production & services, migration of labour from urban to rural, social distancing etc. India with population of over 130 Crore is bound to get impacted in multiple ways due to stretched lockdown of over 50 days across the length & breadth of the country with possibility of it extending further in hotspots. CRISIL has revised India’s GDP growth to 1.8% and similar growth is projected by agencies like World Bank & IMF. This pale growth is also dependent on good monsoon and low crude oil prices. In all probability, the actual growth number is likely to be lower than this due deep & impactful lockdown.
It’s an unprecedented event, with no similarity whatsoever to previous crises in terms of geographical spread of virus to economic fallout across the world. Last checked, over 3.35 million people across 225 countries got infected resulting in loss of over 2,39,000 precious lives. Any comparison to previous crises like financial crisis of 2008 or SARS or great depression of 1930 will only lower the severity of this crisis since most of earlier crises were either singular in nature, sector or geography.
Time to economic recovery will be both hard & long contingent upon containment of spread, easing of lockdown, impact on demand & supply both globally as well as locally and policy/stimulus support from respective governments across the world. Given so many factors influencing each other, it does not at all look like a V shaped recovery. All the sectors across the spectrum will take a hit either directly or indirectly. Noticeably the worst hit sectors could be auto, airlines, retail, tourism, real estate, banking, construction etc. & relatively lesser hit sectors could be pharma, health care, essential commodities etc.
But every dark cloud has silver lining. Across the world, there has been growing “mistrust” on anything to do with China ranging from legal suits filed against it for damages, to calling COVID19 as “Made in China” or “Chinese Virus”, to incentives for shifting manufacturing base out of China. Only time will tell, as to how much of this “mistrust” will translate into actual shifting of businesses from China. India, due to its inherent strengths like democracy and demographics that is young, resilient and entrepreneurial has potential to emerge as the key beneficiary after circa 2020 “AC” i.e. “After COVID”. Not to forget, with relatively lesser spread of virus to the number of tests done (our test positivity rate is 4.4%) and with even lesser fatality rate to number of people infected (3.25%), we have done phenomenally better than other countries, including developed world. Huge population and inadequate medical infrastructure only makes it even greater achievement, led by all COVID warriors for whom we all must be eternally grateful. We may call it better immunity, largely young population, strong leadership that quickly decided for nationwide full lockdown together with equally strong implementation of it at the state & municipal levels, or simple luck, it’s a remarkable and undeniable fact, that the world will going to notice.
However, to be the key beneficiary of this new world order, we must do all that it takes to do better in terms of ease of doing business that reflects on the ground reality. We need to correct high cost of starting & running any business establishment. A large component of establishment cost is high and “unreal” real estate costs and “really” high cost of capital (interest rates). We need to have better policies that do not threaten people but trust, enable & encourage them to become responsible, honest citizens & entrepreneurs. We also need to drastically improve on many social parameters like education that is holistic & focuses on overall development, healthcare including mental health, population and pollution control, hygiene and cleanliness which will result into better standard of living.
Not only the government but all of us as, “we the citizens of India” need to rise to the occasion, reflect on and reset our lives to do better for the society and in turn, our own selves.
