Author: Business Today l April 28, 2020 l Image Credit: The Setinal
It is an understatement to say that our world has changed dramatically over the last few months. The novel coronavirus pandemic has resulted in unimaginable loss to the global economy and the loss of human lives has been unprecedented in an era of global peace.
Not only are the numbers alarming but, the speed at which the challenges have emerged is intimidating. Governments and health professionals are constantly calibrating the response to this pandemic and frequent strategic adjustments are being done.
We are now in lockdown, exploring novel medical treatments and are on the hunt for a vaccine that will stop this virus in its tracks. And since the scenario is grim, doctors, scientists, and governments are working on an accelerated mission mode.
First, let us get an understanding of the economic impact of the novel coronavirus. The Asian Development Bank has estimated that the global economic cost of the virus is a whopping $2 to $4 trillion.
Going by the damages estimated by some legal firms, the figure goes up to an unimaginable $6.5 trillion. Back home, the economy is being battered as well. Under complete lockdown less than a quarter of India's $2.8 trillion economy is functional. We are expected to lose over Rs 32,000 crore ($4.5 billion) every day during the lockdown.
Huge human cost
While the impact of novel coronavirus on businesses has been devastating worldwide, the human cost has also been staggering. In India, those with savings and access to shelter and food have managed to weather the storm albeit with difficulty.
However, the impact on a large proportion of the 40 million migrant labourers, those who provide the muscle to power India's construction, agriculture and other sectors, has been especially heart-wrenching.
After the extension of lockdown on April 14, in a desperate bid to get home, vast numbers of migrants started to move. With no public transport available, lakhs of labourers started trudging home along the highways.
Some were coaxed to stay at government shelters where food and shelter were provided and many others were convinced to return to their place of work and stay put.
Helped by local communities and government agencies, they have managed to cope with the lockdown. The saga of their journeys will be told over time and there will be plenty to learn from their experience.
The tsunami of novel coronavirus has impacted most business sectors from aviation to hospitality, from real estate to apparel, from agriculture to poultry, from petroleum to shipping. The list is long and comprehensive and no sector has been spared. Yet the captains of the industry are cautiously upbeat about the recovery.
First priority - defeating COVID-19
So, is there any light at the end of the tunnel, and where do we go from here? We may be stating the obvious but it is worthwhile reiterating that the greatest challenge before us is tackling the effects of the COVID-19 pandemic.
The top priority is finding a way to defeat or neutralise the effects of the virus. All other battles can be handled once we cross this particular challenge. Thanks to the timely action initiated by our government, India, has outperformed most other countries in slowing down the pandemic.
Racing to build infrastructure at great cost
Despite the early setbacks, the response from our healthcare sector, both private and government, has been robust and proficient.
Testing has been ramped up quickly and more than half a million samples have been tested as of April 22 throughout the country.
Nationwide a total of 586 hospitals have been marked as dedicated COVID-19 hospitals with a capacity of over 100,000 isolation beds and 11,500 ICU beds reserved for coronavirus patients.
At Apollo, we have 590 dedicated negative pressure beds for COVID-19 patients across our hospitals and in partnership with leading corporates and hotels chain, Project Stay I (Isolation) rooms have been created, with readiness to scale to up to 5000 if needed.
Using extraordinary innovation, train compartments have been prepared to serve as isolation wards and our military too is prepared for an untoward eventuality.
Doctors, nurses, administration, and support staff have shown that they can rise spectacularly to the occasion. All this has come at a great financial cost to the entire sector. Unless the health sector is supported generously, it will not be able to deliver its full potential.
The next phase of human development will depend on ensuring that our population is a healthy and prudent investment in the health facilities will make that a greater reality.
Get set, go
Next, we must focus on re-booting the Indian economy. For the past few years there has been a decline in India's GDP growth rates and the problem has been further exacerbated by the COVID-19 pandemic.
The Indian economy is expected to languish in the 1% to 2% zone next year. When the crisis ends, and when the economy starts running again, the first few countries to get off the starting block will be at an advantage.
Can the industry manage to get up and start sprinting on its own? No, every government in the world will have to lend their industry a hand. We in India will need a high octane financial boost. But we all know that governments have taken a beating as far as tax revenues and foreign remittances are concerned. Therefore, governments will have to focus on those sectors that will deliver the biggest bang for the buck.
Getting India to work again
Luckily for us, our agricultural backbone that accounts for almost 14% of our GDP can recover quickly and in fact, grow next year.
But they must be supported by logistics and storage. The expected normal monsoon this year will help the sector maintain its momentum.
Once the threat of the virus recedes, the service industry, the number one contributor to our GDP will start cruising again. We cannot underplay the impact of the COVID-19 pandemic but unlike geophysical disasters and wars, the physical infrastructure of the industry has survived without damage.
Therefore, most industries can quickly become operational if they have the labour force back and the working capital to restart their business.
The Micro, Small and Medium Enterprises (MSMEs) sector, which contributes to 30% of India's GDP, is one of the key drivers of the Indian economy.
Today, almost all MSMEs are out of action due to the lockdown, they are unable to pay their employees and several don't have the financial resources to re-start their businesses.
The government is contemplating a Rs 20,000 crore relief package for this sector. The other sectors that need help urgently are tourism, aviation, automobile, and real estate.
These sectors will put people back to work and build some traction in the recovery of our economy. This may all sound simple, but obviously there is no easy fix to this unprecedented crisis.
What is most important for us is to get people safely back to work and that will be possible only when we can provide the best possible healthcare to our citizens, as there cannot be a lockdown on medical care, ever.
The COVID-19 pandemic and the consequent situation has shaken us all, but what we need now is a judicious mix of optimism and caution.
Civilisation has endured several crises in its history which we have put behind us, we will overcome again. This too shall pass.