The harsh reality of today is that India, who has now entered the ‘top 10 countries worst hit by Coronavirus’ category is also predicted to face its worst recession in 40 years. There is no fib to the fact that Coronavirus and the consequential lockdown has turned our lives upside down. Work and income have moved close to a standstill for most organizations. Moreover, with a two-month lockdown, large number of migrants have returned to their hometown due to the loss of jobs, which has further eroded the economy. Nevertheless, there are some sectors and groups of people who have also benefitted from these challenging times.
Let us look at the various sectors of the economy that have gained and faced a loss during the lockdown.
Sectors that faced a loss
Post lockdown decision, all private companies and most of the public companies directed their employees to work from home. Due to this, the working class has come to realize that it can work from anywhere they want, as long as they have the required environment, internet connection, and electronics. People have started realizing that staying in the big city is not worth it after all and migrate back to their hometowns, to stay with their family. Moreover, due to the overall downfall of the economy, huge investments and expenditures like purchasing properties is going to be very for the pockets of many.
As the outbreak of the Coronavirus spread to all countries, international as well as domestic flights were canceled in the blink of an eye. This means that more or less the aviation industry is at a pause. Even after the virus is contained, it will be a while before people start traveling for more than necessary trips, given the fear that has overpowered the hearts of people across the world. Due to the dramatic decrease in passenger traffic, airlines have had to ask for Federal assistance. According to AITA, Airlines could experience an 11-19% loss in passenger revenues globally.
Only those retailers who have not converted their businesses to e-commerce or online basis, have been suffering.
Local Markets: Overt markets that used to be crowded with people now stand closed. Many of these do not have the budget or knowledge to upgrade their work systems. Such retail businesses have been deeply affected as for them.
The global demand for oil had witnessed a major drop in the month of March, April, and the continued to drop faster than ever. Economic standstill and reduction in the purchases of oil by nations as per essential requirement brought the demand and oil prices down. Thankfully the demand has increased but the supply is lying low. Hence prices have picked pace once again.
This is probably the worst-hit sector of the economy. The tourism industry is more or less dead, at least for the next couple of years. The effect of the virus is going to stay for longer than anyone had expected. With social distancing being an ongoing practice, travel plans will not be of anyone’s priority.
MSME (Micro, Small & Medium Enterprises):
The farmers, vendors, migrants, and other homeless workers making a living in the city areas, are the ones who have been hit hardest by the pandemic. Most of them are daily wage earners and whose lives are completely at stake. Even before the lockdown, they would face problems but now more so than ever.
The government itself will have a hard time to cope with the impact of the Covid-19 crisis. Many state governments have already run out of funds and taken loans. Various enterprises and sectors too are expecting some kind of reserve funds for themselves during such times.
The Centre for Monitoring Indian Economy (CMIE) has claimed that 14 crore Indian workers in the informal sector had either lost their jobs or are in the process of losing it. Every other day multinational and large scale companies are sacking employees. Some even force them to resign so as to not force any legal problems for the same.
Rs 183 billion Indian media and entertainment industry too, has been engulfed by the evil of the virus. Big released have been postponed, the shooting of films, ads and web series have halted. Apart from actors, directors and producers, the worst affected are those daily wage workers of the film industry whose contribution to the on-screen glamour is uncompromising. As mentioned in the Indian Express, according to a Financial Express report, “the film industry faced a decline of 29.1 per cent to Rs 1062.4 crore in the first quarter of 2020, which stood at Rs 1499.4 crore for the same period last year.”
Sectors that gained
There has been a major rise in the EdTech sector. Companies like BYJU’s, Unacademy, Toppr, Vedantu, Udemy are some of the Indian grown companies that have witnessed major growth since the start of the Pandemic. A classroom, which earlier could not be imagined without boards and benches has shifted to a comfortable, home which makes learning easier.
While many companies and industries are failing to cope and adapt to the new and required form of working, some like the digital marketing and e-commerce industries are making the best out of this time. Services of courier and home delivery saw an increase after the Lockdown 2.0 and since then businesses have been on a high. This is contrary to what was earlier predicted by analysts who felt these businesses would go down the hill.
This is not the first time that financial and stock markets have seen dark days. There is no doubt that the markets are facing crises as a result of the pandemic. While most of the investors have pulled out of the stock market and funds are at an all-time low, corporate bonds and government too, have had to face losses. Many developing nations including India, have traveled back in time in terms of the financial state. However, there have been financial crises in the past as well and the markets have survived and boomed from those challenges as well. Fluctuations are integral to the finance market and this time too the world will combat this crisis and revive the market.
Health and Life insurance policies are being purchased by people who obviously fear the virus. This has shown a significant increase here.
With the economy being so severely hit, the best and the only solution for everyone today is to step back and reassess the plan. The pandemic has affected everyone. Maybe the change you are reluctant to make might be even more fruitful than the original plan as you aren’t the only factor involved and it would adversely affect those factors too. Cuts will have to be made. Projects will have to be postponed or replanned. Downfalls will have to be faced. Once again, nature is here to remind us; Survival of the Fittest.