Economy

Post-lockdown, current business alternatives may become the new norm

Pratim Ranjan Bose Kolkata | Updated on April 21, 2020 Published on April 21, 2020

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Corporates may adapt and enjoy cost benefits

Before India went into lockdown, Arindam Guha was a frequent flier. As Partner (Government and Public Services Leader) at Deloitte India, he had to be at different destinations to recommend strategies to corporates and governments.

But for nearly a month now, Guha is at home, like most other Indians; but his work remains unaffected. He is meeting clients, making presentations using digital medium.

 

With Covid-19 unlikely to make an exit in a hurry, many of the current fallback measures may become accepted norms of business —road shows may be held remotely, renting out huge office space may become passé. Technology is available to allow IT-BPO employees operate from home.

“It’s all about the mindset,” Guha says, adding that internationally, corporates are gearing up to adapt to the situation and enjoy cost benefits. There is no reason why Indian business will be left behind.

Technological divide

One definite outcome of the disruption is greater stress on technology, both in services and manufacturing sectors.

Demand for commercial space may suffer due to measures such as work-from-home and greater penetration of e-commerce, as people may prefer to avoid crowded brick-and-mortar stores.

However, the impact may not be uniform. Local kirana stores, which is keeping life going during the lockdown when e-commerce delivery of essentials is not available, may get a fresh lease of life through various aggregation services such as Near.Store.

An anticipated outcome of such activities is more formalisation of the economy. Currently, half of India’s service sector is in the unorganised sector. There is a possibility that the share of the formal sector will increase post-Covid-19 through popularisation of e-commerce tools.

India’s manufacturing sector has been witnessing increasing use of modern technologies like artificial intelligence, robotics, in the past few years. Guha says the trend will consolidate, but with varying intensity from sector to sector.

A major area of concern is unequal distribution of benefits of technology. Small and micro enterprises (SMEs) may feel serious challenge in keeping with the changing demand and work profile of large industries in the post-Covid-19 scenario.

Stimulus

Guha feels the problem can be solved through modernisation of common machine rooms in industrial clusters. He is also expecting the government to resolve a major concern of the MSME sector by enhancing credit guarantee.

MSME is not the only sector that needs attention. Covid-19 has opened an opportunity for India to create domestic value chain. Guha sees tremendous opportunity for value addition in areas such as textiles, electronics, pharma and petrochemicals.

“India had already taken initiatives to set up eight bulk drug parks, which are now in different stages of competition, to reduce the dependence on China in sourcing basic raw materials. There may be more such measures.”

Expectation is rife that the upcoming stimulus package will offer major incentives to attract global investment in select areas where India has maximum opportunity for domestic value-addition.

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Published on April 21, 2020
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