Coronavirus’ Burden on the Economy

Thursday, 21 January 2021



Coronavirus’ Burden on the Economy

Sidharth Bedi Varma | April 21, 2020 12:21 hrs

As the lockdown enters phase 2 and now India is discussing relaxations starting April 20th, we have to realize that we’re in this for the long haul. From 20th April, businesses will slowly dip their foot in the cold waters and see whether they would like to swim or just sit back and wait this out until the 3rd of May.

With that in mind, the last decade has seen India’s ‘renteer class’ grow. This class has typically survived on steep rental incomes with steep expenditures (including paying taxes). But what a large chunk of people in this group have failed to do is invest this money in creating sustainable livelihood/business opportunities. This money came in, came out and is now a mere Facebook memory.

That being said, the COVID-19 has left property owners in stretches like GS Road high and dry. With business establishments and companies seeking “Force Majeure” and the government asking landlords to not seek rent, the ‘renteer class’ has been backed to a corner. Even if landlords accept a delay in collection of rents, are banks willing to accommodate delay in payment of loans? Have EMIs been waived off?

GDP growth in the country was already projected on the lower end and the COVID-19 has impacted this even further. The IMF’s estimation of the world economy has a loss of $9 trillion and even more, if the problem isn’t tackled.

The challenge here is that the economic backbone has been broken. With the daily wage workers out of jobs and homelessness becoming a major add on in times of social distancing, where is the nation heading and where are we getting out of this?

Of course, I do not want to paint a morbid picture, but just pause and think – if you don’t know where your next meal or paycheque is coming… what will you do?

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