Brij Nath Betab
Major countries of the world fighting the wrath of deadly Covid-19 virus may have praised India for its humanitarian approach in providing them the much needed medicines but back home the situation is grave if not alarming. As all parameters are indicating to the extensions of the Lock down, that ultimately is not the cure, but only a preventive measure, the adverse economic impact may pose bigger and more serious challenges.
International Monetary Fund has already warned that the corona virus has ‘plunged the world into a recession that will be way worse than the global financial crisis’ that we faced a decade ago when the downturn in the US housing sector lead to financial crisis that spread to rest of the world. The difference this time is that the Virus that spread from Wuhan in China and spread to about 170 countries across globe has put human existence at great risk and as a measure to protect life all economic activity has come to a grinding halt.
Situation in India was already worrisome as economy had decelerated. In February Moody’s had cut India’s growth rate to 5.4 % but had projected that the economic recovery will begin this quarter. Unfortunately Corona made things worse and now Asian Development Bank has project a decline in growth to 4%.
Those who consider Stock Market as the mirror of economy may have heaved a sigh of relief with a three thousand point uptick in BSE in the last week but my hunch is that we may not be able to sustain this as hopes of lifting the Lockdown and gradual resumption of some economic activity are not going to be met fully. We may not see a fall like we saw earlier this month from a high of 41,859 and 12,329 respectively down to near about 25,850and 7,583 at BSE and NSE, but no one can say with certainty that a bottom is in place.
While the finance ministry and the RBI have taken certain bold steps and have assured that they are alive to the emerging situation, the fallout of thee lockdown is bound to have adverse impact on the overall economy of the country. Economists and policy planners are worried that with the first phase of three week shutdown GDP will be impacted by 60 percent. Our goal to be a five trillion economy may also get delayed. This will be an alarming situation. As lot many companies and factories have locked down, a grave monitory crisis has abruptly erupted for a large section of factory workers, daily wagers and all those who toil from morning till evening to earn a loaf of bread.
AS means of transportation have been halted, the factories and industrial units in Non -Hotspots areas are bound to face labour problems, even if they are allowed to open. Our exports are bound to suffer as IMF anticipates ‘a sharply negative growth in the world’. There are apprehensions that some small businesses and Start-ups may be wiped out. For daily wagers, domestic workers and self employed daily earners the situation is not better. For some a job loss may lead to starvation.
In the manufacturing sector though many industrialists and company owners have assured their labour force that there will be no wage/ salary cuts, the apparent is evident. Prime Minister Modi has asked business community to act with empathy towards their staff, yet the danger of losing one’s salary or a part of it or even a job cannot be ruled out.
In other sectors like Transport, Aviation, Travel and Tourism, normalcy may take a much longer time. It seems that the construction sector will not see normal activity in this quarter. Service sector may see some activity but in the farm sector, social distancing is bound to impact production. That in turn may result in hoarding and profiteering that will lead to price rise. Economic activity in rural areas in particular, where general masses are either unemployed or under employed are also bound to face the brunt of MPLAD funds diversion to consolidated fund of India ‘to address challenges in fight against Covid-19’. There will be pressure on national resources. A random testing may cost more than six lack crores and Supreme Court has made testing free. States will need more central assistances as their resources will shrink.
Someone may argue that India is not a poor economy but with lockdown continuing, 133 crore stomachs have to be filled and that would be not only an economic but also a social challenge. Government has already acknowledged that we are in a ‘Social emergency’. In this emergency, our life is never going to be the same again. So the solution lies in social awareness regarding changing our life style. An example to guide us can be taken from the environmental improvement that lockdown has resulted in. In the name of growth and development man had mindlessly exploited natural resources. We need to look back and ponder that nature’s abundance is not absolute. Austerity measures in all spheres of life may help.
It may sound out of context but we have to understand the impact of population explosion on our life and resources. Today the fight against this virus is limited to certain cities and only a few cases have been reported from villages. One cannot imagine the catastrophe if the virus spreads to villages in the manner it has spread in major cities. We are in a war like situation but in a battle field the army uses weapons, here we have no weapons available except the social distancing.
Learning a lesson from the present, where even some hospitals have had also to be sealed, there is urgent need to take a look at our ‘National Health Mission’. Budgetary provisions need to be made to open more medical colleges with increased number of seats. The irony is that we have just one allopathic Doctor for about 1500 Indians which is too less than the WHO prescription.
It is imperative that for social distancing, we must not disconnect. Government is doing its job. Insurance for the medical and Para medical staff and others who work 24×7 to mitigate the human sufferings are welcome governmental measures. We the citizens of India also must rise to the occasion and help the needy in this hour of crisis. It is under circumstances like these that humanity and adherence to highest human values are put to test. In the words of the Prime Minister, we have to defeat Corona with Karuna (Compassion).
In the society the haves have a responsibility towards have-nots. There should be no shame in accepting that many households may have scarcity of essentials. People may be short on cash. In times of grave situations like this it is the moral duty of all of us who are comparatively well off that we care for the needy and share whatever material we can with our fellow citizens. God has given us a golden opportunity to serve the humanity. May be the Lord Almighty is testing us and if so, let us pass the test and fail the Virus.
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