Prime Minister (PM) Narendra Modi’s call for a first-of-its-kind “janata curfew” on March 22 was by the people, for the people. It was symbolic of India’s resolve to fight the deadly coronavirus disease (Covid-19) which has thrown global social life and the economy out of kilter. With a rising number of cases in India, we must be prepared to tackle a burgeoning social and economic crisis.
While the public health care system, both at the central and the state level, is dealing with the challenge, the private sector is also fully geared up to assist and support the State in testing, making beds and quarantine facilities for treatment available, training health care workers as well as providing 24×7 helplines and spreading awareness through social media and other such tools.
With the government allowing testing and issuing guidelines for testing in private laboratories, it is necessary to step up capabilities in testing and treatment. The private sector has been in close touch with the government on private-public partnerships (PPP) relating to Covid-19. A powerful ecosystem will soon evolve through PPP to address the medical concerns of this crisis.
There is no room for complacency. The public’s adherence to self-isolate is extremely critical. Also, a combination of health responses, larger public discipline and timely identification of vulnerability, both relating to health care and the economy, is vital in dealing with the challenges thrown up by the spread of the disease.
On the economic front, while companies have been requested not to retrench employees, we must also focus on the unorganised sector, where daily wage earners will be severely affected. A methodology to directly transfer money into their accounts is critical.
Industry has been an active participant in supporting the government in collecting and submitting data and analysing the impact of Covid-19 across sectors and the country at large. In particular, the Federation of Indian Chambers of Commerce and Industry (FICCI) has developed a guide for organisations based on best practices globally. A survey conducted by FICCI shows that there has been a major impact on companies even in the early stages of the crisis. Hence, going forward, with containment measures, it is important to work on a national reconstruction plan to address the damage to the economy.
Over the past few quarters, the Indian economy has experienced a significant slowdown, and is in serious danger of recording growth of below 4% in the coming quarters. To make matters worse, the pandemic has severely impacted efforts that were being made towards economic recovery and has derailed several significant sectors — tourism, hospitality, aviation, financial markets, manufacturing and information technology. There is an urgent need to address the pain points of the industry that could help minimise the impact on economy in general, and Indian businesses in particular. Indisputably, this calls for a combination of monetary, fiscal and financial market measures.
The role of the task force constituted by the PM and led by finance minister Nirmala Sitharaman will be pivotal in framing a national reconstruction plan.
The foremost requirement in the rebuilding exercise is to relax the mandatory filing norms and defer/waive the interest payment and tax liabilities of the companies impacted heavily by the outbreak. Additionally, maintaining liquidity at surplus levels and special liquidity support for companies, non-banking financial companies and banks that come under strain due to the intensifying risk aversion in the financial markets or due to large demand shock will also be crucial.
All payments towards the service of principal, interest and taxes should be deferred by two quarters at this point. These two quarters should not be considered for the calculation of non-performing assets.
As the industry body, several recommendations are being submitted by FICCI to the government to consider including as part of this exercise. In crisis resolution, it is important to look for a silver lining. We must look for potential opportunities even now. Businesses including pharmaceuticals, chemicals, solar power, electric vehicles are facing disruption in supply chains due to the impact of the virus in China. A concerted strategy must be developed for them along with special considerations for manufacturing critical items in the health care sector.
At one end, social distancing, work-from-home and public curfews are keeping people apart. Yet, in innumerable ways, they are bringing the world’s largest democracy together as a collective force. In response to the PM’s address, several people and organisations have come forward to help the vulnerable; some by reducing their salaries, others by paying wages to their staff and supporting workers during self-quarantine. There is a long list of sacrifices being made. We need to get into mission-mode to defeat the spread of Covid-19 and build a new, stronger and healthier India. Together, let’s make this happen.