FIEO GlobalLinker
FIEO GlobalLinker

COVID-19: A blessing in disguise

COVID-19: A blessing in disguise

Economy

N Marwah

N Marwah

4 Jun 2020, 14:57 — 12 min read

Remember Newton's third law 'For every action, there is an equal and opposite reaction'. Similarly, in human life to every negative event, there’s always an opposite positive reaction that brings long-lasting changes. For example, not too far ago in 1991, India had an acute balance of payment and was on the verge of bankruptcy. In the opposite and positive reaction to that India liberalised its economy and thanks to that today we are called ‘Resurgent India’ with foreign reserves of USD 470 billion.

COVID-19 is also presently a mammoth negative event for India and the Indian economy, and it will definitely generate equally strong opposite positive reactions that would bring long lasting changes never imagined hitherto. In this context, I am attempting to list a few tangibles and intangibles that had already happened in response to COVID-19 along with the way we should react positively to build on. You will find that COVID-19 is actually a ‘change accelerator’. In that sense, corona has already achieved in the last few days what the Government could not do in many years. I am of the opinion that corona is going to be truly a blessing in disguise for India. It is like ‘a future that has already happened’.

COVID-19: An overnight paradigm shift

Digital economy

Corona lockdowns imposed digital payment/ transactions on everyone. Those who did not have online arrangements to pay suffered and realised its importance. Corona created a natural hatred towards touching currency notes. In my view, the government should now proactively propagate to shun paper currency and shift to digital payment as a safety tool against corona. This will not only reduce incidences of corona infection but also help to accelerate the transformation into the digital economy. This has the potential to migrate a couple of percentage points from India’s 84% cash economy to the digital economy thus resulting in higher revenue recognition and higher tax collections. This can become corona’s best gift to India.

Also read: You are 5 steps away from setting up your online store with GlobalLinker’s ecommerce platform

Work from home (WFH)

WFH can be a second corona gift to India’s prosperity. So far WFH was sparingly used as a retention/luring perk by few select large corporations but Corona in an overnight made “Work from Home” a new normal. Our cottage industry as such had been working from home for ages. Now formal jobs are also shifted to work from home. If we could standardize, regulate and accelerate WFH, it itself has the potential to catapult India to a different growth orbit of prosperity.

Aggressive WFH can result in higher savings for individual and corporate, higher productivity, lower commuting hassles, and lower air pollution. WFH can also be instrumental in higher and easier availability of jobs with the least migration within India. Last year my company experimented with WFH to search in the USA, Europe and Australia. The experiment was highly successful as we placed more than 10 candidates in the UK, USA, Australia. Now my company is establishing a virtual recruitment organization where everybody works from home. India, being a predominantly service-oriented economy, can easily become a mecca of ‘Work from Home’. WFH deserves a separate article that I would be writing soon. WFH is a true corona boon for India.

Digitally strong India

Even in an extensive and long lockdown, this country is smoothly functioning despite the complete restriction on movement. It has proved that India’s digital infrastructure is strong and can deliver. All those who used to doubt its capability can rest their apprehensions to peace. Now there is a need to accelerate digitization along with some innovative ways to promote it in each and every part of life. Corona has tested our systems and now the Government must have understood its constraints, limitations, and faults. Corona demonstrated gaps and kickstarted the improvements.

Also read: Here's the digital Covid-19 recovery plan and 3 ways to do it

Healthy India: A health capital for the world

For over a month virtually the entire population remained inside that resulted in reduced pollution in the environment. Clubbed with its social distancing, frequent hand washing and disinfectation of the entire country that is going to stay for a long period. This would change the hygiene habits of Indians. 

Corona is paving a way towards a healthy, hygienic and cleaner India provided both citizens and Government build on it. To build a healthy India advantage, we will need to strengthen our cleaning system and health infrastructures. For health infrastructure, India can set up world-class medical and geriatric facilities in every part of India with public Private participation that could transform India from a preferred medical tourism destination into the health capital of the world,

Hospitality and tourist destination

Most of the popular tourist locations in the world are severely COVID impacted. There’s a natural hesitation to visit those countries. Fortunately, India remained relatively COVID safe and recovering faster and also has many tourist destinations. Other countries’ loss can be India’s gain. In that sense, there cannot be a better opportune time to promote Indian tourism. Tourism is the largest employer in the world and Indian youth needs it more than anyone else.

To boost tourism, Government should subsidise heavily inward air tickets to India and hotel room and dining rates in India to attract foreign tourists. Special discounts by Taxi and shopkeepers need to be provided for all foreign tourists. Special desk should be set up with police for the safety of tourists in India. The government should set aside funds for aggressive marketing along with. India can also install retina /biometric scanners at most public places to detect Corona positive patient, apart from the Arogya app already in use. Luckily, India has biometric records of all citizens. This will give further confidence to tourists that India is really Corona safe to travel.  

Indian manufacturing revolution on anvil?

Last year while I was executive searching for the EMS (Electronic Manufacturing Services ) industry in the USA, I came across this information that many companies are planning to shift part of their manufacturing base to India. Now Corona has fueled the distrust for China. It would hasten the shift. The world is keenly looking to come to India but we must add a sweetener. The Government needs to make requisite structural changes and improve the ease of doing the business in India markedly. Even invite Chinese companies to invest in India if they can bring manufacturing excellence along with it. If there’s any time for any manufacturing revolution, it is now or never. Corona may prove to be the inflection point for the Manufacturing Revolution in India.

  1. Indian goodwill uplift: India’s goodwill and humane face got another uplift. A country where citizens are law-abiding and peaceful. Indian innovation be it HCQ, Ventilators Testing kits or even vaccines for Corona, India is not behind, but rather in some cases rather leading from the front.

  2. Sharper recovery: World was already heading slowly towards recession before corona hit it. COVID-19 lockdowns suddenly brought the world economy to a virtual grinding halt. It's akin to hitting the bottom during the lockdowns. So, it is but natural for every country to positively react to redraw its strategy for sharper and quicker recovery. Only time will tell which country succeeds the best. We can only hope India be that one and it looks like India can.

 Few consolations - All is not lost

  1. Oil - Oil prices dropped to USD 25 form USD 70 per barrel but the government intelligently did not pass the benefits to the consumer. Clubbed with very low consumption, a rough estimate of saving is expected to be around INR 3 lakh crore (USD 42bn or approx. 1.5% of GDP). A consolation for the lower deficit.

  2. Agriculture - 70% of India’s population depends upon agriculture and fortunately it is not impacted. The government is emptying half of its grain stock for its aggressive public distribution of grains during COVID-19 lockdown, Now Government can procure more and can perhaps pay more to put more money in farmer’s hands helping the revival of rural demand and economy. The good news is that monsoon forecast for the next crops is normal. So, food inflation is easily controllable which is a great consolation.

  3.  Telecom: Thanks to corona, telecom and internet companies are having a hay day. Work from home becoming the norm, it has changed the fortune of this industry. Corona is a savior for them.

Impact on employment, hiring, recruitment

It hardly needs intelligence to say that the worst impact of corona would be on employment hence recruitment industry would definitely suffer. This is a half-correct view. In the immediate commotion, when nobody knows what to expect, there's obviously going to be a standstill and retrenchment is definitely not ruled out. However, when businesses start acting, there's going to a dichotomy around the world in all commercial and economic activities including recruitment /hiring.

The need for full-time talent would be initially small and critical and on important and urgent basis. Recovery is likely to be in the order of top, senior and mid-level hiring followed by bulk-hiring. Initially, staffing companies would be better off because they are part of the de-risked model. Work From Home (WFH) would be on an immediate basis at all levels both in replacement and new hire basis. It is 9 to 12 months from lockdown opening when the hiring for growth would happen and attrition would reach its new normal peak. Most of the governments across the globe would be announcing mega packages to strengthen confidence to induce fast recovery and to tame the unemployment.

Only the paranoid survive

A few years ago, I happened to read Andrew Grove’s book ‘Only the Paranoid Survive’ the story about Intel’s turnaround from extinction to being one of the world’s largest chipmakers. The situation is similar today. We all, including Governments, are paranoid about corona’s impact. If paranoid has to survive, it has to take harder and considered decisions. The country needs a long term strategic structural solution and not just a stimulus package. Higher deficits and harder decisions, if taken for India's growth and if not wasted largesse, are not going to be questioned now. I hope someone in the Government is sitting on a drawing board to have new look with a mindset ‘it is now or never’. It is the time when one can put India on the path of return to be golden sparrow again or take to the path of no return. Luckily, the current Government is with the decisive majority government and with a decisive mindset. Hence I am confident that  paranoid India will not only survive but will flourish too.

Also read: New paradigm for people and business

Image source: shutterstock.com

To explore business opportunities, link with me by clicking on the 'Connect' button on my eBiz Card.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.

Recommended articles for you

Join a growing community of 300,000+ SMEs. Create your account now.

Already a member?

Log in

Join a growing community of 300,000+ SMEs. Create your account now.

Already a member?

Log in

FIEO GlobalLinker - GET THE BIG BUSINESS ADVANTAGE

Visit mobile site