Ashutosh Rane is a caterer. He did make merry in the marriage season till February. But all his orders ahead stand cancelled. Be it birthday parties or anniversaries or farewells or any kind of party – his order book is currently at zilch.
Along with Ashutosh, there are so many linked to him who are nervous – the decorator, the water supplier, florists, the army of waiters, the cleaners. All of them currently have no work.
Or take the case of Anjali Gupta who runs a beauty parlor. There is no one coming in even to get basic haircuts or cleanups done. She has let go of three of her assistants. The other two know that if the same continues, they will be next.
A five star hotel in BKC Mumbai said that yesterday night the entire place had only ten guests. GoAir has already announced that it has asked some of its employees to stay at home without pay and it also plans to axe those on contractual basis.
So be it the bigwig companies or the small enterprises, right from a baker, gym owner, hotels, restaurants, almost everyone around you and me is anxious. Every startup is hyperventilating. And this is the real impact of the Covid-19. Those getting afflicted and dying due to the virus is direct but all these making a living on the middle and lower rung of the economic ladder are at an increasing risk of falling off if this crisis continues.
Most these SMEs and MSMEs have borrowed money to run their business – to buy the shop or fund the working capital or for getting up the infrastructure. And when March is a washout and another month or two, if this continues, survival for these will become extremely difficult. This is the fear of contagion which all are worried about – if all these small units alone, we are not even looking at the big enterprises, especially those in the travel and tourism business, start defaulting, banks and NBFCs are the ones who are going to take it majorly on the chin.
This is not an alarmist article but just a word of caution of how things could pan out if the virus does not scoot along with the summer heat.
To put our heads in the sand and say that all is well, at this time, will not help. No one knows where this will take us; the bottom seems endless. Hold on to the cash and if need to buy stocks, buy in a staggered way as today’s new lows are not the lows…there is more to come.
US announced a stimulus and India might also but it will be a psychological booster because till the virus goes, nothing will change. RBI has indirectly told us that it can do only this much and the onus is now on the Center. The Govt needs to understand that it needs to take steps to boost money in the hands of the people – a tax cut and monetary transfer is what will help; not an excise duty hike as soon as petrol prices drop! This time, the Govt needs to let go of all its targets – fiscal deficit, direct and indirect tax collections and work on preventing this from getting worse. Afterall what is the use of these targets if majority of the popualtion loses its livelihood!