Vijay Kumar Gaba

The present trends indicate that the Second wave of Covid19 pandemic in India may have peaked in most of the states. In the rest of the country, it is expected to peak in next 4-6 weeks. This should ease the pressure on healthcare ecosystem and bring some relief to the panicked citizens.

The government sources have indicated that India will have enough supply of Covid19 vaccines by end of 2021, and most of the population will be inoculated by the end of FY22. Various scientists have cautioned that we may see another wave of pandemic. However, the global experience so far is that any further spurts in the intensity of the pandemic may not be as devastating as the second wave due to better immunity and preparation of citizens against the virus; and improved healthcare ecosystem. This immunity could develop due to vaccination, infection in earlier waves and/or life style improvements induced by pandemic itself. The greater awareness amongst citizens and healthcare professionals may also help in containing the impact of futures spurts in the intensity of pandemic.

Notwithstanding the uncertainties and skepticism (or cynicism in many cases) witnessed in past 15 months, the thought of a victory over pandemic is definitely comforting.

However, this by no means implies that impact of first couple of waves will be fully mitigated by end of this financial year. I feel the devastation caused by pandemic will take many years, may be a decade, to mitigate. The damage caused to businesses, families, personal finances & health is overwhelming and would require mammoth effort at government, community and personal levels to heal. In particular, the rehabilitation of the impacted families may require mission level effort.

Loss of livelihood

Many families have lost their livelihood. Most of these families are from the bottom half of the pyramid who have lost jobs or their self-owned enterprises are no longer relevant. However, a significant part of these families could be from lower half of the middle class. Some families have lost their single bread earner. Some businesses have become redundant for good. Some families had to incur substantial debt for Covid19 treatment. Some families are left with members with severe disabilities or complications that will take long time and/or significant money to manage/cure.

It is pertinent to note that the pandemic has happened when the economy was already stressed for some years. Numerous smaller businesses were becoming redundant due to twin shocks of demonetization & GST. Bank credit had squeezed and margins dwindled. The larger businesses were gaining market share from them. Banks were reluctant to lend money to them. Besides, growth of ecommerce also led to consolidation of markets and hence lower margins for smaller players. Pandemic just hit the final nail for many of them.

Many street vendors, tutors, trainers, mechanics, etc have permanently lost their jobs as customers have shifted to digital platform for delivery of goods and services. Of course some smarter once have adapted digital methods for delivery, but a large number is facing redundancy for now.

Damage to psyche

The pandemic has caused psychological disorders to a large number of people. Severe illness, loss of close family member, prolonged lockdown, loss of livelihood etc are causing a variety of disorders like anxiety, depression etc., amongst children, young and old alike.

Many unprivileged children who were brought to schools with great effort are out of school again because either their parents have been displaced or cannot afford digital access. Many of these children are showing behavioral changes.

A number of health workers who have worked tirelessly for past one year are also mostly stressed and seen suffering from behavioral issues.

Cynicism and disbelief in system

The behavior of some unscrupulous elements during the pandemic has raised the level of cynicism and disbelief in system in common man. The viral news of people hoarding and black marketing lifesaving drugs, medical appliances and apparatus is broken the confidence of many hardcore nationalists. Exponential propagation of few instances of overcharging by ambulance operators and cremation priests etc has further dented the confidence of people.

The murky war of words between various politicians and their supporters on social media and mainstream media to safeguard their political turf during this extremely sensitive period is further strengthening the cynicism and disbelief.

Covid has indeed triggered a strong community bonding. Exemplary community effort is being made to help fellow citizens. Millions of volunteers and health workers working tirelessly and selflessly. Unfortunately have not received prominent coverage in media and damage has been caused to the social belief system.

Not comparable situation, but post 1984 riots similar conditions had developed for about 1500-2000 Sikh families in Delhi. It took more than two decades to bring their life to near normalization, though many scare still remain.

Given the pan India impact of the pandemic, it would definitely require a decade of mammoth mission scale effort to bring life to near normal.

For investors, discretionary consumption and financial are the sectors that need to be watched carefully.

It would be fair expect that the rehabilitation effort (a) will keep fiscal pressures high and will not let yields fall much from these levels; (b) will not let tax rates ease (could rise) anytime soon.