Undoing the imminent economic threat emanating from CoVid19

What's happening in the World right now is unprecedented. India is trying to shield itself from this crisis snowballing into a big monster, and rightly so.

Yesterday, our PM spoke rather well without the usual theatrics. Infact, for the first time, he was quite shaken up. This only means that the danger is clear and in the present. A break out seems imminent. Which is why we must strictly follow the instructions meted out by the respective administration, against all odds. Come what may.

This will bring our country to a complete halt. Standstill. Pause. A big full stop. I understand this does not sound as grave a problem for the salaried class (Government and multinationals). However, after we emerge from this lockdown, India will be on the brink of an economic meltdown.

Production will have come to a halt. The receipts would come to a halt. However, the expenditure, will have to go on. The bare necessary revenue expenditure in the form of salaries, monthly utility bills, financial obligations and any other such miscellaneous expenditure will have to keep up.

For MSMEs, it will be a very big challenge. Probably, a few players will be on the verge of going bust out of exhaustion of funds.

However, it is the moral duty of such establishments to do whatever is possible and ensure that their people(employees) are given their usual salary. Because the employees have nowhere to go.

This will do two things:

A. The core demand in the economy will stay afloat and help our country from falling into complete doldrums after we emerge from this crisis.

B. The moral and social fabric of our country will be intact and the employees will return to work with double the zest making systems more efficient.

As far as Financial liabilities are concerned, it is my understanding that the government is sensitive towards this peculiar issue and should grant an EMI-moratorium upto June 2020 Atleast. (Assuming the lockdown is not extended)

Once the MSMEs and all the other cash rich traders, multinationals and conglomerates are taken care of, it only solves 20 pc of our problem.

India is a very peculiar country. Behind all the sheen, we have India's unorganised sector at play. A whopping 90 pc (roughly) of our workforce belongs to the unorganised sector. They're the ones that add sheen to our country. Behind closed doors.

Their economics is simple. Cash. On a daily basis. In and out. It's simple math and keeps core demand liquid and running.

During this lockdown, the unorganised sector will be on the brink of collapse. They will be left with no cash or very little cash to kick start operations. Also, the workforce in the unorganised sector is floating. They come and go. Many have gone during this crisis. God only knows how many will come back.

This is a major point of contention and it will take exemplary effort from the Government to BRIDGE THIS GAP after having FLATTENED THE CURVE.

Apart from the unorganised sector, another section in India which is rather neglected is the daily wage labourer (DIHADI MAJDOOR).

Every day, the first thing a dihadi majdoor does is aspire to provide for his family, for the day. Good nutritious food. A luxury for them. They are having the biggest test of their life. Some may perish. Silently. In a corner. Unnoticed. Just like that.

Staying at home, it's very easy to write all of this. But as a common citizen, there is little I can do. I plead to the people in power and/or other influential citizens to do something in this regard. Make sure the DELIVERY CHANNELS of ESSENTIAL COMMODITIES are open to these under privileged citizens as well, SANS DISCRIMINATION.

Three months after we emerge from this crisis, MSMEs might turn insolvent, small traders might go kaput and we will most certainly be left with more number of unemployed than there are currently. NPAs will rise. Markets will crash. It will lead to an economic catastrophe.

During such times, it is more prudent to rely on our domestic demand rather than exports to make sure that the the issues which may arise three-five months from now are thoroughly mitigated.

As a citizen exercising common sense, this is what is required to be done RIGHT NOW:

1. Increase the fiscal deficit. Borrow more from the markets. FRBM can wait. Put this money in the hands of MSMEs and other such financially delicate players.

2. PAUSE the receipt-expenditure cycle (Financial liabilities like EMIs and utility payments) for MSMEs and other such financially delicate players.

3. A stimulus package in a form best suited to the BENEFICIARY, not the BENEFACTOR.

I'm sure these points are far from perfect but with 48-72 hour brainstorming, the government will find it very easy to come up with a STIMULUS PACKAGE. That combined with a RATE CUT, we might be able to mitigate a lot of issues which will emanate as we emerge from this disaster.

DONT FLATTEN THE DEMAND CURVE. It will be the end of us.