Dr. Pradeep Kumar Dhingra
Phd. International Relations and a Chartered Accountant
A lot of pessimism is surrounding us now a days about Covid-19’s impact on us, and on the economy as a whole. There is no denial that this pandemic and lock down will have an effect on one and all; be it rich or poor, no one would be spared. But all is not lost.
The two most important reasons for this pessimism are; the lock down which has created empty minds turning into devil’s workshops. Secondly; the fear psychosis which has developed due to the fact that in a country like India where we always have shortage of resources compared to the demand, this situation has compounded the problem. Scarcity is a normal phenomenon in India and is faced by us all and gets reflected in our behavior as well.
The matter which is bothering all of us is the economic impact of the Covid 19; on employment in India and across the Globe. There is no denial that it would have severe impact on few sectors like aviation, tourism, construction, automobile, ancillary, and construction. But it would open new vistas of opportunities in many areas and in a big way. In India when computers came in a big way in 1990’s, or when private banks came in 2000, or economic collapse and liberalization era of 1991 or Global meltdown in 2008, we came out stronger and this time also these sectors would be impacted but other areas would lead to employment generation. This rebooting of earth is going to benefit in a long way. In last 10-12 days for the first time in many years we have seen clear skies with stars, chirping of birds, and other species of animals come out into the open.
Sectors that would shine in the aftermath of the pandemic would be
1.Medical equipment and pharmaceuticals: A lot of companies are trying to make low cost ventilators, face masks, hazmat suits, and sanitizers. Some of the auto companies have already achieved initial success in this field. They are in the process to make these items from their existing assembly line itself. With such low cost we would not only save on foreign exchange but we can export to many countries as well. For manufacturing these items no fresh plants have been installed, only modifications have been made to existing plants. New entrepreneurs and scientists would be on cloud 9 as new progress has already been made. India has always been strong on pharma and lots of Indian doctors are working abroad and this is golden opportunity for us to make ventilators, hazmat suits, sanitizers and face masks in mass scale.Pharma companies could look for markets outside such as USA and Europe for their drugs. With generic drugs in use can tap many new markets and will lead to huge employment opportunity not only for doctors and scientist but in the assembly line and from packing to dispatch a lot of skilled and unskilled labor can used.
2.Paramedics: A completely forgotten and not looked upon sector in India, has vast potential not only in this time of crisis but going forward also. The requirement of paramedics has been felt for some time but not much attention has been paid on this sector now this is the time we can look into this sector and employment opportunities are huge. With short to medium term course time there can be a large generation of paramedics for employment and largescale ambulance help service to remote locations. Our expenditure of health care is less than 1% GDP, which has to increased substantially and paramedics can lead them in big way.
3.Psychological and mental health: this is one sector which has been acknowledged by one and all as the sector of future and of immense need for last decade or so. But sadly, nothing concrete has been done in this in all these years. After this pandemic, people will have a lot of psychological issues (depression, anxiety, and suicidal tendencies) this needs to be addressed in a systematic way. Care has to be given for each class like men, women, children, adolescents, businessman, laborers, housewives, working women and so on. Government issued employment generation to address the trauma, feelings of anxiety, stress and depression for abovementioned sectors would create employment opportunities for a large number of psychology postgraduates. Separate short-term course on mental health aid could provide them skills to help address the various mental health concerns of our population. According to WHO in 2019, India had only 4,000 mental health professionals to help such a large and growing population’s mental health concerns. Students and recent graduates who face an uncertainty about their job opportunities and timelines being thrown into disarray should be given special guidance counsellors to provide them with necessary help.
4. Textile: Textile is one of the biggest employment generators in India but in last few years we have lost out to other countries. We have lots of advantages in this area but proper planning and implementation has been missing or we have taken this sector for granted. We have the resources, the techniques, cheap labor, and strong associations in this area we can still rise. India still occupies an important place in apparel export and only a push from government is required and it would create employment in abundance not only in manufacturing but also in textile/yarn mills and cultivation of raw material.
5. Agro-export: India has huge agro-export potential where still two thirds of the population are in agriculture but their contribution to the GDP is hardly 16%. We have to tap that potential and start exporting agriculture produce which would give them livelihood. This is hugely surprising that despite such massive population in agriculture we still have to import certain items like edible oils and many a times there is scarcity of items in the open market which result shooting up the prices many folds. (onions and toor dal) So, the need for integrated approach towards agriculture is all the more important at this point of time as compared to any other time.
6.Chemical and allied: India has been making strong voices in International market in the field of chemicals and allied products but, the entire capacity and base has not been tapped. This could be a now or never moment for this industry. We have world class facilities which are being used at 50-60% of their capacities and with existing capacities and without any additional capex we can lead in this market in a big way.
7.Companies which would close manufacturing in China.: Not every company but some of them will close their manufacturing facilities in China and that offers a huge potential to the highly trained Indian labor which is comparable to China in terms of cost and no less in quality. Although there are voices that due to huge trade surpass, China might try to buy those companies that have manufacturing base in China. But they will not be able to succeed in all the cases and that would offer India a huge opportunity, provided we offer them red carpet welcome and provide some tax and other incentives which were provide during Special Economic Zone( SEZ) periods, or tax holiday region , or something of similar nature. Already Samsung, Oppo and Vivo have huge manufacturing facilities in India and it’s time to strengthen this base and upgrade those production in India.
8. Manufacturing: Make in India which government has been trying for last few years to promote and now there is a Golden Opportunity in this is one area which can transform India. Since at present we are at the same stage where China was about 30 years ago. Due to increase in manufacturing activities, export, and setting up of manufacturing hubs of companies in China they have grown exponentially in the World. This is a big employment generator without any big training to the labor force and capex can be and would be from those companies and a manufacturing activity also leads to development of ancillary activities in big way.
9.E-commerce: this is one of biggest booming business model in India and now a days there are hardly any household which is not touched by this. Even in villages they have penetrated in a big way. Amazon, Flipkart etc. have demand not only from tier 1 cities but from tier 2-4 cities too. So, this sector has huge potential and is expected to generate employment of about millions in next two years. Today our lives are incomplete without deliveries from Amazon, Myntra or Swiggy. Related to this is warehousing and logistic support. Delhi-Mumbai Freight corridor is about to be completed and that belt offers potential for logistic support and warehousing since these e- commerce companies require huge storage space and strong demand chain supply mechanism. Demand chain and supply support will further create close to 2-3 million jobs in next three years.
10. Digitalization: A number of streaming services and digitalization platforms have been created over the last few years. Going forward this is the way we can tap this area which along with e- commerce will become a backbone of employment in next 2-3 years. People will realize the importance of this platform and will strive to do something in this field. Brick and mortar model will survive but smart work over hard will thrive and digitalization is a step in that direction. With huge foot-print in IT and related services in the world, we have right platform to offer good opportunities in this field.
11.Reverse auto demand: Due to physical distancing (I would prefer to call it physical distancing rather than social distancing which has other connotation in a country like India) a certain class of people would prefer to avoid travelling in public transport and would opt for their vehicle. This can spur demand in short term and the shortfall of few months might get matched by this demand. As we have seen in the last few years there have been huge demands in automobiles from car aggregators (Ola, Uber), which have not fully absorbed the shortfall in growth of auto industry and has benefited it in in a big way.
12. Great consumption story: Apart from above we have huge internal demand for each and everything and that is because of the fact that birthrate per day in India is close to 50,000. India has one of the highest youngest population in the World which is in demand creating and is always craving for more.
13. Government spending: Although a lot of stimulus has been announced by the government, spending has to be increased without caring for fiscal deficit since those figures would be irrelevant at this point of time as resources are already constrained. Apart from roads construction (which would increase demand in cement and steel industry), cleanliness and hygiene activities in continuation of Swachh Bharat (without further CESS) and construction labor, other areas of government spending can be in other schemes of social welfare. However, it should be related to work and no freebies are required. Lot of work in the construction is required in school, hospitals, dams, river integration, law & order, judiciary infrastructure to come out of this pandemic
Take a pledge to not let this global pandemic become an economic pandemic. We have to saves lives and livelihood in order to grow after the dust is settled.Pix & arti