Patna Express: Coronavirus Adverse Economic Impact: Get ready for Financial Tsunami

Monday, 11 May 2020

Coronavirus Adverse Economic Impact: Get ready for Financial Tsunami

The rapid transmission of coronavirus across the world has claimed the lives of many folks. Apart from this, a large number of individuals are suffering from this disease. With each passing day, the number of people infected with coronavirus continues to increase. Governments around the world have imposed a strict lockdown in their countries to stop the rapid transmission of Coronavirus. All economic activities are suspended. Only essential services are available to all. India is also observing lockdown-3. Despite the government's best efforts, the cases of coronavirus are increasing sharply with each passing day. 

Due to the imposition of lockdown, a large number of daily workers and labourers became unemployed at one go. They started to experience financial problems, lack of food, repeated calls from landlords to pay room rents and electricity bills, etc. As they didn't get any help from the central and state governments, many migrant workers had no option but to commence a dangerous journey to their home states on foot, bicycles, rickshaws, minibuses. Many individuals lost their lives. 

As all means of transportation are suspended and there is a lack of adequate arrangements (of food & shelter) for poor people, many people clashed with the police & demanded their return to home states. Many state governments requested the central government to start railway services for migrant workers. Now, special trains are being operated to take people from one state to another. Due to lockdown, people are forced to stay inside their homes. Many companies have laid off non-essential employees. Several companies have slashed the salaries of their workers and sent many of them on "unpaid leaves". 

Currently, the unemployment rate in India has reached up to 27.11% with 122 million Indians out of work. To be frank, I am also jobless and trapped in Delhi. I am burning my savings to meet my daily needs. The subsequent extensions of lockdown making it difficult for me to look for new job opportunities and bring the financial life back on the right track. Due to lockdown, business communities, companies, factories, oil-producing countries, aviation firms, hotels, restaurants, etc., are suffering tremendous losses with each passing day. Even the central & state governments have started to feel fiscal deficit due to the subsequent extensions of lockdown. 

The overall tax collection has dropped sharply. Governments in India collect taxes through GST, VAT, petroleum products, wines, etc. The falling income forced them to open wine shops across India. We saw a huge crowd of drinkers in front of wine shops early buying alcoholic beverages in bulk. The mad crowd of professional drinkers did not think it necessary to follow social distancing. Many of them were not using masks. At many places, the situation turned ugly forcing, forcing police to launch lathi-charge to disperse the crowd. Some shopkeepers closed the shop after seeing the crowd going mad for wine. 

The government of India is also bringing Indians back to the country who lost their jobs in foreign countries due to the coronavirus epidemic & lockdown. As migrant workers are returning to their home states little by little, the business community has expressed grave concerns about the shortage of the required workforce when the lockdown & coronavirus episode comes to an end. Many labourers who returned to their home states successfully anyhow have said they will not return to work anytime soon. 

Most of them will try to seek employment in local areas only. Facing a shortage of workers, the CM's of different states called Bihar CM regarding this. For the time being, India's poor states are not in a position to provide employment opportunities to a large number of migrants. If the coronavirus episode continues for a long period, prepare yourself for a financial doomsday & complete crash. 


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