Reviewing the state of country’s economy and the condition of small and local business post the COVID-19 pandemic.
A vegetable vendor sitting idle
The COVID-19 outbreak has changed every individual’s perspective toward life. Each part of people’s lives along with the economy, politics, culture, and society in India has been affected. With dislocation in global production, supply chains and trade, the pandemic has successfully cast its shadow across various economic activities in the country.
This pandemic has been an eye-opener and has made it clear for the country that future planning is a necessity. While most of the working sector was not prepared to deal with an extremist situation of this scale, economic ventures in India navigate the boundaries of the formal and informal sectors which makes it important to understand what the owners of small businesses, start-ups, and the self-employed are facing amidst the lock-down. Every industry is different and therefore it becomes very important to understand the diverse need of these businesses and focus on specific sectors which could yield greater results.
It is confirmed that 65-75% of the innovation in India comes from the industry of small business. A research conducted in April 2020, resulted in calculating that due to the major outbreak over 80% of India’s small businesses expect to scale down, shut shop, or sell off in six months. There have been both layoffs and pay cuts in the private sector, in media houses, in NGOs and corporate houses. The worst-hit sectors include technology and auto.
In times like these, the people are in a difficult place to start businesses, and having local help on board is the key to unlocking the country’s vast economic potential but furthermore talking about the work force in the country, around 90% of India’s workforce, work in the informal sector in India, and face deep job insecurity with most of the workers being unqualified or under-qualified.
To address these adverse situations by releasing notifications/amendments/circulars, the government of India has been preparing strategies and action plans not only for business continuity and sectoral revival but also to improve ease of doing business in the country. At this point there is a need to engage in steps that are eminently feasible and with first steps like the adoption of national logistics policy already in progress we are working towards gradually solving this problem. To promote more participation in the supply chains, India’s startups and small businesses have mentioned the need to move away from an input base system to a more support base system.
The government and the judiciary have also asked the employers not to lay off employees but there needs to be policy interventions for the same. As it is rightly said, with great uncertainties comes great responsibilities. Provisions for emergencies of this sort must be made well in advance and since the COVID-19 crisis is not going to go away anytime soon, we must be prepared with adequate policy measures.