Dhanendra Kumar

This New Year was ushered in by another Covid variant -- Omicron -- which is spreading at a faster rate. As the daily case-load count crosses 1 lakh, speculation is rife regarding lockdowns. Some parts of the country such as Maharashtra, Delhi and Kolkata have already started implementing night and weekend curfews and other curbs.

While these developments may appear overwhelming, one must ask the question if we are adequately prepared to handle the ongoing crisis. From a healthcare standpoint, the government has indeed taken huge strides. India has vaccinated more than 150 crore peoplewhile ramping up hospital infrastructure, testing capabilities and oxygen supply. Despite an exponential rise in cases, the situation hasn’t reached the nadir of the previous waves.

Pandemic and livelihoods

Health, safety, and effective treatment are the primary concerns of policy makers during these times. However, it is imperative to monitor the economy which has a direct impact on the livelihood of millions of Indians.

According to a working paper published by the IMF, “The stringent national lockdowns led to a 24 per cent decline in GDP in the second quarter of last year [2020], the largest among G20 countries.” The GDP numbers showed a 7.7 per cent decline of the economy in FY21. HSBC has stated that the new restrictions could lower the nation’s economic growth by about a quarter of a percentage point in the current fiscal year.

Among the worst impacted by lockdowns is the MSME sector. According to an ILO report, there are estimated 63 million MSMEs in the country, providing employment to around 120 million workers. However, most of them are micro in size, and as a result subjected to many risks.

The same report stated that a total of 92 per cent unit owners reported cascading effects of the pandemic on their business which led to approximately 45 per cent of the enterprises to lay off workers either temporarily or permanently, while 85 per cent of the workers reported not having access to any social security.

Learning from experience

While we have indeed performed exceptionally well in vaccinations, there is need of learning from the past two waves, as also from global experience, to mitigate economic damage by prioritising e-commerce. Firstly, Central and State governments may need to ensure everyone has access to goods and services while maintaining Covid protocols.

In previous lockdowns, the essential/non-essential classification was considered unavoidable to maintain physical social distancing for brick-and-mortar shops. The same classification for e-commerce was, however, superfluous since no contact deliveries and social distancing are intrinsic in e-commerce.

In fact, the government has taken prudent and timely measures to ensure that delivery personnel are double vaccinated. Companies like Amazon, Swiggy and Zomato have led the way to vaccinate their employees, which safeguards their wellbeing and allows them to earn a livelihood during the pandemic.

E-commerce not only helps the economy by allowing small businesses and delivery personnel to operate but is immensely beneficial for consumers who have also grown to rely on e-commerce during lockdowns. Companies like Amazon which has more than 60 Fulfilment Centres across 15 States, offering a combined storage space close to 43 million cubic feet has 1,850 delivery stations across the country, are not only ensuring safe deliveries but also providing economic opportunities. When you add numbers of other e-commerce companies to this then imagine potent of e-commerce to economic revival of the country.

E-comm gaining pace

In Local Circles Survey published in March 2021, 49 per cent respondents, of online survey of 42,000 unique consumers located in 358 districts of India, chose e-commerce to buy goods. An overwhelming 86 per cent of the respondents, stated that it was because e-commerce allowed for “safe deliveries or no reason to step out.” The pandemic has accelerated digital adoption in the country.

India’s e-commerce orders volume increased by 36 per cent in the last quarter of 2020. This is particularly interesting since e-commerce sales in India were estimated to increase by only 7-8 per cent in 2020 according to IBEF.

According to a Nasscom report, “E-commerce in India is growing at 3-4X the rate of traditional brick and mortal retail”. The proliferation of internet and mobile devices along with consolidation of end-to-end supply chains has equipped Indian e-commerce to be a global leader.

Having said that, Indian e-commerce’s lasting legacy will be the role it has played and which can potentially play to help millions during the pandemic. Indian policy makers may need to consider allowing delivery personnel to operate without restrictions while also allowing delivery of both essential and non-essential goods when infections peak.

This will mitigate any adverse effects on the economy, protect consumers by strict enforcement of Covid protocols and enable millions of small businesses and other personnel dependent on the e-commerce ecosystem to survive the devastating effects of a lockdown. With our joint efforts, we shall undoubtedly come out a winner, this time too.

The writer is former Chairman, Competition Commission of India and Executive Director for India at World Bank