Sanjiva Jha Founder CEO BroadArk Technologies on Covid19 Impact


Often it takes some calamity to awaken us, makes us live in present and see all the mistakes we have committed. When it has been suffered, first thing to be remembered is how much has escaped and how to move forward with that in the new direction.  


COVID19 is overwhelming for all. World is under lockdown; either stated or federal mandated. Everyone is joining hands to fight this challenge together in whichever way they can. But at the same time, everyone is also curious to know how post COVID19 world will be. 


So, I requested Mr. Sanjiva Jha to guide me and my readers about it. 


Mr. Sanjiva Jha is Founder-CEO of BroadArk Technologies Pvt. Ltd. His company owns the brand Y&NOW and works in the field of Education and Skilling. But this is just a small part of his illustrious career of around 28 years at leadership positions with LabourNet Services India Pvt. Ltd., Tata Teleservices Ltd. Reliance Retail Ltd., Boots Healthcare, Cargill India Ltd. etc. He has Masters degree in Management from IRMA and Bachelor degree in Chemical Engineering from BIT, Sindri. He has led cross functional teams during growth, massive organizational restructuring post US subprime crisis and merger & acquisitions. So, who could be better than him to guide us and see this current situation in right perspective? Here we have his views


 The Covid Impact: 

 

What has been the most striking impact or consequence of the Covid pandemic?


I believe some of the most striking consequences of this pandemic have been the game-changing impact on our social behaviour and patterns of economic activity. And yes, the economic impact will be rather severe and could be crippling for the economy if not addressed immediately but at the same time this will also present some opportunities! Speed, agility, and innovation are required from governments, businesses, and society in crafting responses to cope with this evolving new normal. 


Let’s look at where India stands in all this pandemonium caused by this pandemic.


One of the biggest casualties of the lockdown and the ensuing social distancing has been the informal sector - the daily wage earners, the migrant labourers, the gig workers and the contract workers. We saw some rather grim images of stranded migrant labourers in light of the lockdown. It was distressing to see migrant workers walking hundreds of kilometres to go back to their native place. We have witnessed a huge volume of reverse migration - workers rushing back to reach their homes from the Metros and mini metros. The government and other public agencies have been quick to act and organize relief measures and helplines to direct the flow of these people. Has it been enough, perhaps not, a lot more needs to be done as these sections do not have the wherewithal to withstand the prolonged period of lockdown and then there is the question of how do we get them back to work post the easing down of the lockdown situation? No easy answers here but surely a lot more needs to be done in terms of just providing basic relief and survival kits. We have seen a stimulus of around 0.85% of the GDP being announced by the government; this may need to be bumped up significantly. Sample this we have Germany which has pumped in around 8%, Malaysia at 16% of the GDP,(these are far smaller countries with a population of 83mn and 32 mn resp) agreed these are economies at a different phase not comparable to India but we do need to reach out to this section with more, the prolonged lockdown till May 3rd will only add to the woes..


The rising uncertainties in contractual labour will also impact the MSMEs. Exports, which account for a large chunk of MSME earnings, are expected to fall as the US and Europe are reeling from the impact of the coronavirus. 


Another impacted sector would be the non-essential items due to a steep reduction in the consumption. These include consumer durables like TVs, ACs, transport, communication services, Lux goods, Beauty salons. This is certainly the quarter these companies would like to forget... With increasing job losses and pay cuts across industries, non-essential spending will be hit further, and big businesses will be affected eventually. One of the worst hit sectors amongst the non-essential is the apparel sector which employs a sizable number of contract labourers. Not difficult to fathom, the lockdown has necessitated temporary closures of factories and lay-offs of low-wage earners. We could see a possible opportunity here, as the sector reeling under reduction in yarn exports and restriction on raw material imports will give a fillip to the local sourcing opportunities for garment manufacturers, which may prevent prices from going up once the markets open.


The other big industry which will continue to face the downturn and probably face extinction in the short run unless they innovate and move onto other business streams - logistics or the last mile delivery for instance, Travel and Tourism. The sector is reeling from large-scale cancellations and a complete pause on domestic operations. Both outbound travel and inbound travel to India are expected to be at an all-time low this year. The losses are estimated in the range of Rs.90-100 bn. 


Essentials will continue to be in demand and get serviced and fulfilled with the government taking an increasingly active role in ensuring uninterrupted supplies of ‘essentials’. Essentials include food, clothing, soaps detergents, soaps, detergents, housing, gas and electricity. A word of caution, any prolonged disruption of the supply chain might lead to shortages and thus inflation in the medium term. Ecommerce, retail and internet businesses would be less affected because most of their offerings fall under “essential items”.


So, what is the plausible way forward? Who are the winners and who are the losers in a limited sense here?  


Clearly a massive round of stimulus would be required to ensure the marginalised sections sustain the lockdown and we build resilience in the economy. According to the Economic Survey of 2018–19, almost 93 percent of the country’s total workforce—an estimated 437 million people—is informal. This includes agricultural, construction, manufacturing, sanitation, and domestic workers. This sector contributes to nearly half of the country’s GDP. A tough balancing act considering the fiscal deficit is already under pressure and not in the best of health so to say


Who are the winners - Pharma, ecommerce, retail, fmcg, IT ITES, Healthcare, logistics

Who are the losers - Travel and Tourism, Inland Transport, Restaurants and Eateries, Consumer Durables, Banking and Finance


India has been amongst the first few countries to take up the Covid fightback plan early on, though the curve is yet to be flattened but shows signs of containment, with a well-planned comprehensive measure starting with testing, tracking, tracing, containment and enforcing social distancing it is expected that we will be able to build the necessary resilience, next two weeks would be critical. 


You can reach to Mr. Sanjiva Jha at LinkedIn Address

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