SOCIO-ECONOMIC EFFECTS OF THE LOCKDOWNS
DR.VINOD KHANNA
Dehra Dun
Had it been a nuclear explosion the impact may not have been as much a disasterous as due to this Covid-19 explosion. The nuclear explosion is mainly aimed at a regional or a limited geographical entity, whose impact maybe for the short term that emits shock waves, injuring the humans and collapsing structures and flying debris and the release of heat, blast and radiation to kill the masses and also to have a severe impact on the socio-economic status of the targeted place, not at random but planned.
The CORONA pandemic is far more destructive as it has no set targets but to explode uncontrollably, anywhere exponentially, in blasting proportions. The nuclear explosion has the force to explode and spread but the Corona Virus does not have the force to spread. It gets spread through the human carriers or through fomites, un-intentionally, unaware, tiny, not visible, but far-reaching and with the sole objective to multiply at a much faster rate than you can think.
There is no limit to its explosion, no time to explode, no boundaries, geographical or otherwise, to restrict, no season to be active, and is, therefore, I categorize it as more devastating than the impact of an atom bomb .It occurs across all demography and hence pandemic.
The impact of COVID explosion is more devastating not only on the human populations indiscriminately, disregarding all the casts, creeds, culture, poor or rich, color or creed and religion but their socio-economic status is badly challenged, in such a short period and to an unknown duration, with losses and damages at the astronomical levels by such a tiny non-biological entity which has a great power of replication.
The world cannot imagine the strategies to work out any policies for its check, a couple of months of invasion has shaken the minds of the beaurocrats and technocrats towards uncertainty to the point of no return. The murmuring from the top sources is now on to learn to live with the virus.
The impact of the explosion is seen and experienced in the industries globally that brought the GDPs down to levels beyond anybody's imaginations, job loss in millions, and productivity in trillions.
The worst affected industries are
1. AVIATION INDUSTRY:
i. The domestic and international travels are closed causing a colossal loss financially estimated to be around $113 billion.
ii. Airfares came down to nearly 30%.
iii. Domestic traffic growth drastically affected by cancellations.
iv. Cash reserves of the airlines are running slow and many are almost at the brink of bankruptcy.
v. The expected loss of revenue is between S500–600 million in Q4.
vi. The crisis could lead to job loss and pay cuts or leaves without pay.
2. TOURS, TRAVELS, and HOSPITALITY INDUSTRY
The cascading effect of Coronavirus is crippling the tourism and hospitality industries which have come under immense financial strain. Cruises, airlines, and hotels are the worst sufferers.
i. Foreign tourist arrival dropped
ii. The archeological sites that generated plenty of revenue from the foreign tourist are drawing no crowds.
iii. Travel agents, hoteliers, and airlines are receiving cancellations.
iv. Private stakeholders will not be able to recover without a bailout package from the governments.
v. The interconnected industries are starting huge losses.
vi. The unskilled people become the weakest link in the entire change.
vii. The scenario is horrible.
viii. India’s lockdown on travel and tourism may cause 38 million jobs in the industry.
3. E-Marketing/ E-Commerce
The global trend now a day has been on e-marketing. The trade has come under clout.
i. The restrictions on to fulfill only essential goods such as groceries have led the E-marketing companies have led to cutting on other offerings.
ii. The latest orders of the governments allow full operations in the green zone and orange zones with limitations.
iii. The current rate of operations in e-commerce is less than 10% of its gross merchandise value prior to lockdown that began on 25th March.
4. Education Industry:
The greatest loss being experienced is in the education Industry, who even after having the full-fledged infrastructure and facilities are not able to interact with the students in real-time.
i. The virtual online classes, in some of the Universities, are though catering to the student's community, at their homes, on their smartphones, smart TVs or pcs/laptops, and the quality is to compromise, since options are not there and the E-learning being a new mode for many, has some attractions.
ii. The expenditure on salaries is as usual.
iii. Revenue generations are barely minimum as the students are not able to pay the fee because of their parents getting no pay/ sliced pay/ deferred pay and on the top of it. The government pressure of no chase on fees from students.
iv. The examinations cannot be conducted under the social distancing norms, for the availability of limited space in the examination halls, not being able to seat as per the new matrix.
V. The time of the year is also for promoting business for the next year intakes, and since the examinations are not yet held for the eligible students, any attempt on luring them for your college would be futile at this juncture.
Vi. Advertising for the new admissions, normally done during these seasons, is going unnoticed as the expected contingent of students are not themselves sure of their career options, without their percentages in hand.
Vii.Uncertainty at the start of the new sessions and the completion of courses in the new semesters in compliance with the University’s norms.
5. Textile Industry
i. According to Cloth Manufacturing Associations of India (CMAI), there could be as many as One Crore job cuts in the Industry.
ii. The CMAI says that most of its members do not have the reserves to last for 3–6 months of this magnitude.
iii. The closing of the garment industry would impact the entire value chain from fabric supply to zipper and labels.
iv. An expected drop in revenue is more than a massive 40%.
v. 50% of small retailers expressed their inability to open their stores.
6. Malls and markets: Malls and cinema halls, the two larger segments that attract footfalls is and will be hit hardest during and post lockdowns. The food and cinemas at Malls will be last to revive at the shopping centers being the largest traffickers. The electronics, homewares, and fitness types of equipment’, will however bounce back as earlier as people prefer to stay at home post lockdown. The food courts at the malls will not draw more crowds for fear of social distancing and contract carriers.
7. Transport Industry: Despite canceling or reduction of flights putting substantial impact on air
Freight and available capacity, the cargo plane is still operating between countries, as usual. However, the sea, road, or other logistical activities are a subject of the local government's decisions. The employees are either physically present and or teleworking with all technical arrangements for remote managements
8. Railways: Indian Railways is looking for the loss of something between 90K Crore to 1.48L Crore in the FY 20–21.
i. Cancellation of booked tickets
ii. No fresh bookings
iii. Refund of cancellations
iv. Start of the bookings for the trains starting on 12th May only through online bookings and to limited destinations may be small solace to the travelers and to the railways.
9. Media: The top broadcasters, media buyers and advertisers stare at the drop of around 30–40%
in ad revenue despite Indians spending more time at homes watching TVs only during the ongoing lockdowns, after the top spending companies putting their campaigns on hold or even canceling.
10. Food INDUSTRY: The food processing industry is certainly in the center of the essential
Goods and Services and as it is very difficult to survive without food and the governments paving ways to facilitate the movements of raw materials and finished products to the stores and for easy access to the consumers, despite enormous logistical issues, the industry remained at the center of its hub and made the business, as usual, more disciplined and no panic.
11. Junk food Industries: Like Pizza huts, Dominos and Mc Donald, Subways, CCDs and various roadside eating joints that made a big business, were left way behind in business because of the Stay homes and social distancing the wise people started turning to their own kitchens, looking for more online and offline recipes and spending more time around food preparations may have definitely impacted the economy generated through these outlets but it is estimated by Kantar World Panel that there will be 503 million more (+38%) in home meals eaten more per week in this lockdown period.
The dynamics behind meals eaten in the homes are significantly impacted in lockdown since without morning rush we see more people spending time together eating breakfasts that present a unique product opportunity.
COVID 19 has changed our eating habits. Less on non-veg and more on veggies.
14. Doctors and Hospitals: Most effected, clinics closed, traffic went on online due to the fear of contracting infections, queries regarding cough, cold, sore throats and body ache increased by 200 % but the consultation fees, some complained of charging double, while mostly not charging or with no hike, but for sure the guidance was proper, at least from the family doctors.etc. Some resorted to the online mode of payments, while some patients directly visited the medi-shop for across the counter medicines.
15. Dentists, ENT, Maternity Hospitals, and Pathology: Such doctors and the clinics are believably the worst sufferers as they cannot deal with the patients without having come in direct physical touch with the patient, both the doctors and the patient being seen as suspected carriers. Their income during the lockdown is Zero; however, they have to pay for their staff.
16. Pharma Industry: India’s pharmaceutical sales rose in March, albeit at a sluggish pace, owing to panic buying of medicines for chronic ailments such as cardiac and diabetes amid a nationwide lockdown to combat the coronavirus pandemic. Sales grew 8.9 percent year-on-year to Rs 11,856 Crore, according to data released by AIOCD-AWACS — a pharmaceutical market research organization.
17. Tailors and Cobblers: Most effected with no record of the effect on the economy available.
18. Small-time vendors, Tea: most affected.
19. Labor and Construction workers: More than 92.5% of laborers, including daily wage earners, have lost work for up to three weeks owing to the 21-day lockdown, according to a survey of 3,196 migrant workers in the north and central India. The construction sector in India employs the highest number of migrant workers of which around 55 million are daily wagers. These daily wagers have been adversely impacted due to unemployment, lack of savings, and no access to social security measures to sustain the lockdown.
20. Saloons and hairdressers: A self haircut would have been beyond the skill set of most people but no longer is it so under the COVID-19 lockdown. Making a virtue out of necessity is coming true with much experimenting hairdressing on their own as salons are out of bounds for nearly a month now in view of the shutdown to check the spread of coronavirus.
21. Film and Television Industry: Big releases postponed, film, TV and web series shootings halted, theatres unable to screen movies, daily wage employees struggling for their next meal… the Rs 183 billion Indian film industry is going through its worst phase because of the lockdown necessitated by the coronavirus pandemic. The impact of the lockdown on the industry at large is still being evaluated.
22. Advertising: For creative’s in the advertising world, working remotely — away from the confines of an office isn’t an uncommon practice. However, the frenzied churn for newer creative’s that reduced the life span of each piece of the creative to a few weeks has also slowed down and the race to get ‘something new’ out there takes precedence over getting it right. So the advertising agency does not see much pleasure and creativity during the uncertainty of the lockdown. A big loss to the Industry.
23. Housing and loans, 24. Banking and finance, 25. Automobile Industry 26. Floriculture and Horticulture Industry 27, Non-Veg Industry, and 28. Liquor Industry, 29. Sports and Games (IPL washed away) are the other important industries that contribute as a giant wheel to the economic growth and GDP of any country and the socio-economic status of the states/Countries that need to be addressed in great details, but is beyond the scope of the present communication is left to the imagination of the readers.
The COVID-19 pandemic has had far-reaching consequences beyond the spread of the disease itself and efforts to quarantine it. As the SARS-CoV-2 virus has spread around the globe, concerns have shifted from supply-side manufacturing issues to decreased business in the services sector.
The pandemic caused the largest global recession in history, with more than a third of the global population at the time being placed on lockdown.
Supply shortages are expected to affect a number of sectors due to panic increased buying, usage of goods to fight the pandemic, and disruption to factories and logistics in mainland China, in addition, it also led to price gouging.
There have been widespread reports of supply shortages of pharmaceuticals, with many areas seeing panic buying and consequent shortages of food and other essential grocery items. The technology industry, in particular, has been warning about delays to shipments of electronic goods.
Global stock markets fell on 24 February 2020 due to a significant rise in the number of COVID-19 cases outside mainland China. By 28 February 2020, stock markets worldwide saw their largest single-week declines since the 2008 financial crisis. Global stock markets crashed in March 2020, with falls of several percent in the world’s major indices.
As the pandemic spreads, global conferences and events across technology, fashion, and sports are being canceled or postponed.
While the monetary impact on the travel and trade industry is yet to be estimated, it is likely to be in the billions and increasing.
