Do you feel the tug? Consumption has been pulled down to the basics in ‘COVID Kaal’. And new investments are at best neutral, if not negative. The economy is in limbo. New estimates indicate that the Indian economy will shrink by a range of 5.2% or 1.6%, depending on who is estimating.
Consumption and investments are really bed-partners. When consumption is up, investments are up, and when consumption goes to sleep, investments hibernate as well. The key issue for the moment then is the fact that consumption has gone to sleep for now. And new investments are keeping their distance, just waiting to see those early signs of consumption waking up, to get the coffee going.
And who put consumption to sleep this time around? A virus. A disease called Covid19, and the entire paranoia created around the virus ever since the turn of the year 2020. Last year’s virus put consumption to sleep for the most part of this year. And threatens to do so longer than estimates estimate.
As the world focused its attention on the virus and its containment, lockdowns became part of the vocabulary of governance and management, and everything else went into limbo. The economy included.
In many ways, governments of many nations focused on the virus and the threat it posed to the people, the healthcare system, and the systems and costs necessary to manage the pandemic. Everything else was secondary.
The Lockdown as a tool to curtail and control the spread of the virus ensured one thing dominantly. It killed the celebratory economy that believed in the splurge. It brought people down to the basics. The lockdown made people re-think the basics like nothing else before has. It made people rich and poor think. It re-defined the basics even. Food and drink were basics. And everything else was really non-essential in the language of the lockdown.
The lockdown made the economy go indoors. The home was your oyster now and the Oyster was your world. The outdoor economy was killed. The commute economy died. Government bus services died just as much as private commute cab aggregators did. The restaurant died a small death. The airlines died bigger deaths. Retail died. Even the economy of alcohol, which has seldom seen death, died, albeit a very temporary death.
As consumers sat indoors, everybody has had the time to think. In the initial weeks there sure was a withdrawal symptom that hit many. The celebratory economy has its highs, and those who have enjoyed those highs know what it is to miss being a part of it. But as the weeks passed by, the indoor life made people think deeper still I guess. Some even stopped missing the hustle and bustle of outdoor life. Some postponed their celebratory life-styles waiting for life and the economy to reopen. A small number of others possibly even swore off the un-essentials in their lives.
There are some within us who have sworn not to buy that second car. Some of us have said to ourselves that we will think of our immediate community more than we ever did before. Some of us have sworn to be more concerned about our environment, more pristine as it has become with less-pollution and less-emissions of every kind (rhetoric included). And some of us have said we will think every time we spend money and audit if it is an essential buy or not. In the case of many of us, this will be quite like the New Year resolution one makes and never keeps. Nevertheless, we have thought the noble thought.
Now that we have thought the noble thought, it is time to ask those questions as well. Big questions we seldom ask when on the roller coaster of the celebratory economy. There is very little time to ask these questions as the economy is just about opening up, and soon we will all be caught in the midst of making it run again, faster than ever before.
Must the economy really grow at 8% per annum, as many of us want it to? And who are these many who want it to grow at 8% really? And who are these that define growth to be in terms of GDP numbers? Is GDP the only metric we must focus upon as a nation?
What if we focus on the number of people who must have a productive job in the country instead? One job means livelihood for 5.5 people. Must we focus on creating that one job in every part of the geography of India, rural, ‘rurban’ and urban? Must we focus on ensuring full-time employment for every working-age & willing prospect in the country?
Must we think of touching the largest numbers of our people with the offer of jobs rather than just focusing on discovering the deepest value across sectors for GDP gains? Must we really dumb-down the economy from the focus on a few to the focus on the many?
Covid19 has been a pause-moment in our lives. It has forced us to think pace again. Must we now, as we open up, force the pace, or must we accept the newly defined pace with a focus on the many, instead of the focus on the few?
The big question than at the end of it all. Is the recession really bad then? Or is it a figment of the imagination of a modern consumerist society that believes that all of us need to eat more brands and drink more brands to keep discovering higher notch-points of value in the GDP ladder?
Must we take those twenty hollow steps backward to get to that one big solid step forward of the future? Let’s think this out as well.
The author is Founder, Harish Bijoor Consults Inc.