The impact and wellbeing of Covid-19?
The corona crisis is rampant with no signs to end anytime soon, no one knows how long the crisis will continue or what will be the volume of the damage. Amidst this healthcare concern, there is also this growing concern about the economic loss of lock down, loss of employment, loss of capital. with a recent publication circulating in web media platform that the Lawyers body Bar Council of India has written the Prime Ministers seeking a subsistence Allowance of Rs. 20,000 per month, it is clear that everyone expects a good bailout package for their survival or to make good of the corona impact. Come what may, there is also remains this deep-rooted fact that that a large bailout may have an adverse impact on the Rupee and bring in more volatility than good. The Corona crisis is a shocker and will absorb the impact on its own timelines.
So the Headway?
To bring their economy back or to minimise the corona impact, nations have started announcing economic packages amid the Coronavirus pandemic gripping countries across the globe. With the corona crisis nearing the 1,000 marks, the Government of India perhaps seeing an estimation of where will the healthcare cost , recently announced a 1.7 lakh crore packages for the poor. This according to the Financial Minister is for the basic survival and wellbeing of the poor and the government will come up with more offering for the other needy, deprived and affected. This no doubt will benefit the most vulnerable poor listed under the Government Schemes such as the The Pradhan Mantri Garib Kalyan Yojana, MNREGA. The Government has also shown solidarity to the organised sector by announcing there Provident contribution shall be borne by the Government of three months. The government has announced that the Pandemic Corona will be ground enabling to withdraw 75% of the of their corpus ot three months wages to ensure liquidity in their hands. Small or big, these remedies provide som relief to the organised sector then what really expose is the vulnerability of the poor working in SME, unorganised sector. The government need to come with plans to bail pout this sector which has already witness mass termination, wages cut off.
The Good, Bad and Ugly of Corona business
With lock down across the country and no one venturing out, has witnessed a safe road, reduction in noise pollution, good air for those leaving in the most polluted cities. Once a rare sight is common now With little or no noise around, birds have been chirping all. The best of the best for the millennials and working class has been their family time. The industry as a whole is struggling to get out of the stress and to be back to normalcy, worst are the start ups whos are in the verge of collapse with no scope of funding and revival. Despite, few are making a consequential fortune of business out of the Corona crisis. Tops in the fortune table is hand sanitizer brands, safety masks. In the face of the pandemic, immunity can be our biggest weapon. With this in mind, and alongside clear directives from many government authorities to steer clear of crowded places, home exercise programs and the fitness equipment industry are well-positioned to boom and so are the online gaming platforms to provide an entertaining space who otherwise feels a break from work place is home locked.
Worst of India Inc and Expectations.
The most distressed are the India Inc working in tourism, hospitality, Fitness, automobiles and aviation, besides micro, small and medium enterprises (MSMEs), where cash flows are down to a trickle amid mandatory adherence to tax and statutory payments. Not to forget the stories of start-ups founded recently now collapsing like bubbles with the economy showing no signs of revival in near future.
The India Inc desperately look that the RBI bring in relief measures for distressed businesses including a moratorium on debt repayments and redefinition of non-performing assets. The RBI has been good and kind so far to Join the Government initiative and provide the much-needed relief by moratorium on EMI payments, interest cuts and other policy reforms in the offing.
The writer is a Chartered Accountant and can be reached on sudhir@pamsassociates.com