Wishful thinking aside
Our optimism for a swift return to normalcy post-Corona aside, realistic plans must be drawn up and executed to reflect a world permanently changed by this pandemic
Will everything be the same once lockdown is over and the threat of COVID-19 recedes? Accustomed as we are to live in our cocoon, we would like to enjoy our routine as before immediately on the resumption of life or whatever will be left post-pandemic. This helps us to go back to our well-trodden comfort zone. The expectation from the governments' world over will be to give us back our lives in the shapes we recognise them. This is the wish of everyone from the super-rich to the super-poor.
'If wishes were horses, beggars would ride', is a Scottish proverb. No major catastrophe resettles life as before. There always are corrective measures big or small. Judged by the enormity of the cataclysm, the corrective steps must match the enormity of the damage it brought to life across the world.
First, take the migrants in large cities who suffered the most due to lockdown. Living on the edge, these persons were dependent on casual and unsecured work, as domestic help, driver, cleaner, electrician, plumber or casual vendors pushing carts full of daily needs. Living in the cities, while lacking the self-sufficiency of village life, could still hold promise due to the scope for extra income. This promise came to a grinding halt with no source of income and the reality of being caged in the claustrophobic room where they used to go back to sleep after work. If we saw assembly of migrants in Delhi or Mumbai, it was due to this desperation. Will such migrants who managed to go back home return post-haste and join the workforce as before?
Second, what about the unfortunate migrants who are struggling to survive in a hostile unfriendly slum, those who assembled at Bandra to go back home? Will they not try to rush back home the moment there is any transport available? Many of them may not like to stay back and suffer an uncertain future. More so, since the relaxation of the lockdown will not bring in complete normalisation but will come with several restrictions and warnings giving them the feeling that not all is clear and rightly so.
It will take some time before normalisation sets in and the pace of daily activities as before resumes. Labour-intensive sectors including services will have a slow pace of restarting. That this is not idle prediction was seen when people tried e-commerce sites like Big Basket or Amazon Pantry for daily needs, only to find out that getting a delivery slot, to say the least, is like winning the lottery. Once the lockdown is lifted, this service will take some time to come back to normalcy.
No less important will be the change in demand pattern in the market. Consumers will certainly conserve their resources and wait for the depleted value of their savings to somewhat recoup the losses. Add to that salary cuts, salary freezes and job cuts already announced by some sectors, media for instance, and the likely hit on consumption will be clear. Consumption demand is expected to recover only after a few quarters. Till then, consumers will buy only the bare necessities. The slowdown in demand that was quite visible even before COVID-19 hit us will continue, slowing down further. Sentiments will recover with a lag after the market recovers. The message is clear that the market has no immediate reason to get out of a depressing scene.
The effect of this will be felt in lack of jobs which was already pinching the economy. Now in a depressed state, those who were earning livelihoods as self-employed will find it even more difficult to manage. The huge problem of unemployment will create social tension and delay economic recovery even further.
As far as the Government is concerned, the problem is so complex that only a very carefully laid out plan can revive the economy after about a year or so. Early prediction of sufficient monsoon is a good signal but this must be matched by plentiful support for the farmers, in the procurement process of crops which was delayed due to the lockdown and also providing liquidity for sowing the monsoon crops. The Government has the onerous task of not depriving the farm producers adequate profits and at the same time not letting food prices spiral out of hand in what is certain to be a liquidity injected economy.
In other words, keeping inflation under control is a critical task. More so to help the middle class who have suffered during the lockdown and are destined to suffer even more due to the loss of future earnings. No less critical is the continuation of health sector investment since the Coronavirus is here to stay. A more permanent solution requires vaccination which will take at least 18 months or so to arrive on the market. Treatment at present is experimental at best. There has to be properly laid down guidelines for treatment. The Government has to invest in health care, spend more than what it was budgeting earlier. Naturally, the Government has to balance between two immediate needs — healthcare and public spending to revive a sagging economy.
Regardless of whether we would like to admit it or not, our lives have entered a dark tunnel which shows no signs of light at the end of this proverbial tunnel as of now. If the policies are framed carefully and executed sincerely without any leakages, India may move back to a seven per cent rate of GDP growth. When the Reserve Bank Governor expressed the magic figure for the next fiscal 2021-22 we all loved to agree with him. Only the Scottish proverb makes us worried – 'If wishes were horses, beggars would ride.'
Views expressed are strictly personal