Currently, along with China the whole world has been infected with the Corona virus. Its origins, effects, spreads, symptoms and methods of defense are being discussed and debated everywhere, and everyone seems to be standing up against this enemy. Even doctors are having difference of opinion between eating habits and whether or not there is a need to use masks. In this whole confusion the ordinary public seems to be confused and intimidated in their routine.
In reality, Corona virus is not new. SARS disease, which came a few years ago, was also a form of corona. But the spread of the new virus called COVID-19 has caused chaos in the entire world. After its first occurrence in Wuhan province of China in December-January, it has continued to spread worldwide in a short period of time.
According to the latest report by the World Health Organization (WHO), Corona has spread in more than 117 countries so far, more than 1 lakh 25 thousand people have been infected, and more than 4,600 have deceased worldwide. In India, two people have died, and the number of infected people is rising by the day.
Setback to the economy
Although it is important to look at Corona in terms of health, the economic impact of this virus is also severe. The impact of this disease on the global economy is now visible on local businesses too. Needless to say, this virus has brought the global economy into jeopardy by disrupting the global supply chain. It is estimated that till now the global economy has suffered a loss of 15 billion dollars and the loss will continue to increase.
It is doubtful whether the oil war between the oil producing countries (OPEC), Russia and the United States will be beneficial for other countries and whether it will reach the consumers. Due to the business warfare amongst these countries and overall slowdown of the global economy, the demand for oil has reduced, if the government decides, oil importing country like us can surely benefit from this situation. Internet and technology have brought the world closer. The dealings with IT companies providing services to developed nations has increased so much that a halt in business of one country immediately hits the business in some other country.
Country’s auto industry is also suffering a lot. Due to the absence of spare parts for the vehicles coming from China and the raw materials for the drugs, it has adversely affected the pharmaceutical and automotive industries. Tourism and transportation sectors are in the shadow of recession. Pilgrimage areas, food joints, shopping malls and public places are empty.
Agriculture is going through major crisis due to Corona. When the price for onions was decreasing, demand for fruits and green vegetables has declined. Large quantity of fish and shrimp is also exported from the country. Poultry business has suffered majorly due to the rumors spread about the Corona virus. This business is facing losses of a whopping 400 crores every month. Chicken is priced at meager Rs.10 per kg and this has also affected the other poultry related industries. Farmers who have been growing crops like maize and soybeans are also facing difficulties as food production companies have stopped buying them. In Maharashtra alone, directly or indirectly 10 lakh people in poultry business are suffering.
Considering the devastation in the agricultural sector, which is the saviour of the country, the government must take immediate measures for industries like poultry which are suffering loss of crores of rupees daily.
Impact on exports
Corona first hit the exports. Exports have stagnated in many countries and due to this, from mango and grape farmers to traders and from workers to entrepreneurs all have become helpless. Currently, every country is dependent on another country in global economy. This magnifies the issues. Many industries are on the verge of closure. Same goes for the pharmaceutical companies. If the situation of reduced demand in the E – commerce companies and rising pressure on the cab companies, continues to be like this, then things may take a frightening turn. Textiles, machinery, small-scale engineering industries, IT services, all may need to pay hefty price for this.
Impact on unorganized sectors
We have 90% jobs that are in the unorganized sectors. Rickshaw drivers, taxis drivers, street toy vendors, tea makers, waiters, mechanics, young boys and girls working in the malls, paper-glass-scrapers, construction workers, semi-skilled, unskilled workers and many such workers who work on daily wages are suffering due to Corona. The economy hit by demonetisation was just recovering when this crisis of Corona has hit. We can take an example of a simple tea. Currently the population in our state is almost 12 crores. Even if 1 crore people decide not to have tea in a restaurant, if we take a cup of tea worth Rs. 10, the tea vendors are going to face a loss of 300 crores a month by this calculation. Also, the daily wages workers do not have a habit of savings. How can they even think of savings when there is nothing left to save? If Corona’s condition lasts for another month or two like this, then it will be difficult for this class to survive. In such a situation, many families are likely to get involved in a vicious cycle of debt by taking money from the lenders (Saokars) at any interest rate to pay the bills. Many have purchased vehicles on loans from banks. But due to the corona’s impact on the transport sector, if the loan installments are not repaid in time, banks will also increase their NPA’s in future. It can negatively impact real estate and other sectors. Multiplexes are shut. Therefore, the income of those who depend on this profession as well as the actors in the theater and backstage workers will be affected. All these things need to be looked into as well.
Currently unemployment has reached its peak in the state and across the country. There is also fear of further increase due to corona. Therefore, it is necessary to immediately study the impact of this on the industry and consider what measures need to be taken. It can start with communication. For this, it will be possible to find a quick way out of this if we start having discussions with small, medium and large businesses and their organizations immediately.
Opportunities to consider during slowdown
World economists like Tom Oric, however, are seeing this as the gold rush for developing countries, while the world may be in the throes of an economic downturn. The disease is also seen as a door to progress for developing economies like India. Sometimes best comes out of worst. Similarly, opportunities can arise from Corona crisis. It is up to the governors to have the vision and the readiness to simply find and embody it.
As an illustration, MIDC and the state government must take timely steps to turn the automobile companies operating in China or expanding their industries China to our country. These companies are afraid to move to China because of SARS or the current Corona. If we provide them with the facilities they need, then our unemployment will be reduced, and job opportunities will be created for our youth.
India, and Maharashtra in particular, can be a safe option for those fearful of China and those seeking alternative. It can also bring a revitalization to the economy that has been degraded. But for this, the central and state governments should take initiative and take immediate steps to reduce taxation and other possible measures. Also, a committee of economists should study the short and long-term effects of the outbreak of Corona virus in the coming years and take appropriate steps in time.
Emergence of new working pattern
Corona is spreading rapidly due to close contact. Therefore, the state government has ordered to close schools, colleges, malls and theaters. Some companies have even allowed work from home to its employees. A new work mechanism may also emerge from this. While it is difficult to say what it will be like in future, it will have a direct impact on the economy, for sure!
Ultimately, if personal hygiene and necessary precautions are taken, this disease will contain, but long-term measures will be the only effective way to save the country from the economic slowdown created by this disease