“Crises and deadlocks when they occur, have at least this advantage that they force us to think.” -Jawaharlal Nehru
As of today, there are 1,347,587 confirmed cases of Coronavirus and 74,782 deaths all over the world. In the grand scheme of things, this virus hasn’t hit India too bad with 4,778 cases and 136 deaths. Much of this should be credited to India’s proactive leadership in dealing with the current situation. The courage to enforce a strict nationwide lockdown must be lauded as India still battles through the second phase of COVID-19.
While it may be the biggest lockdown in the history of mankind, there are opportunities to do things, we as a nation could never do before.
Threats
Panic – Like all viruses, Coronavirus is highly contagious. Add 1.3 billion-people to the mix and it paints a very sorry picture. The possibility of the disease spreading is quite high thanks to our booming population density per square mile. TRP hungry media houses keep rolling out damning news about the virus without any authenticity. What ensues next is a nation riddled with anxiety, fear and panic.
The Big R – Coronavirus has hit us at a time when our economy isn’t doing too well. In fact, our economic slump was one of the worst slowdowns with gross domestic product growth at sub-5% per annum. In such times, the people who will be hurt the most are the 700 million-odd citizens who live at subsistence-level. In view of this lockdown, private and public enterprises have enough wherewithal to ensure salary payments to its employees. But what about the informal sector that has close to 85% of India’s workforce dependent on daily wages to make ends meet? If the demonetization period was any indicator of the resilience of this workforce, their future looks bleak is a gross understatement. Such an inevitable decline in India’s economic activities points towards only one thing – Recession.
Opportunities
Bullish stock market
The current massacre on Dalal street is not for the faint-hearted. With Nifty holding at a paltry 8,200 level, COVID-19 has really affected businesses all over the country. What we need right now is an influx of cash, and we need it now. We need to learn from the US on how to convert a crisis into a windfall. America’s financial crisis of 2008 is a prime example of how to turn a dwindling economy into the biggest opportunity driving income through an uninterrupted 11-year bull run in the US stock markets. The US Senate recently passed a $2 trillion coronavirus spending bill, as it looks to replicate its fine run post the 2008 financial crisis. If they can do it, surely India can as well.
RBI’s timely measures
After the Government’s Rs 1.70 lakh crore coronavirus counter, the RBI has come up with several measures to mitigate the impact of Coronavirus. The highlight was a moratorium of three months of EMIs on all outstanding loans. This means that for the next 3 months, there won’t be any EMI deducted from anyone’s account, which has an outstanding loan. The moratorium applies to corporate loans, home loans, car loans and even personal loans. Another slew of measures are –
— Auction of targeted long term repo operations of 3-year tenor for total amount Rs 1,00,000 crore at a floating rate.
— Reduction of CRR for all banks by 100 basis points. Will release Rs 1,37,000 crore across the banking system.
— Accommodation under the Marginal Standing Facility to be increased from 2% from SLR to 3% with immediate effect till June 30. It will release Rs 1.37 lakh crore into the system.
Theses 3 measures will collectively add Rs 3,74,000 crore to the country’s financial system.
Aid to local businesses
The Centre’s relief measures such a tax cuts, measures to infuse liquidity, lower interest rates, forbearance of loans, credit guarantees, etc. are much needed to give impetus to desi enterprises. The world is racing to create a vaccine for Coronavirus. Governments from all over the world are working overtime to find a cure as soon as possible. To combat the virus, many Indian companies, especially startups, are rallying resources to come up with quick solutions.
– Pune-based Serum Institute is developing an algorithm to find out the viral genetic sequence that could serve as a vaccine.
-Mumbai-based startup Haptik, which builds Intelligent Virtual Assistant solutions, launched a WhatsApp hotline last month to provide correct information regarding the novel Coronavirus.
-Bengaluru-based insurtech startup Digit Insurance has rolled out a fixed-benefit health insurance policy designed specifically to cover COVID-19.
