Making a Departure in Lock Down

Telangana makes a departure on Lockdown Strategy:

There are no two opinions on saving the humans should be of utmost importance when compared to saving the economy, although the economy lives longer than the human being. Therefore, strategically, saving the economy and saving the human life should run parallel as far as possible.

In the case of COVID-19, governments initially had no choice but to save lives by locking down to strictly enforcing people staying at home setting aside the economy’s interests very rightly. As things unfolded, there is broad realization that rescuing the economy from the recession and moving to V curve should also not brook any delay. In fact, compared to several States, Telangana has singular advantage moving on consistently high growth trajectory till April 2019.

The breather given by PM Modi on lockdown relaxation while extending the final date to May 3, 2020 allowed relaxations to keep several working populations in a new normal – barring the barbers who have the largest potential to spread the Covid. Welders, mechanics, electricians and even construction workers were all allowed to go back to work on the strict compliance of wearing the mask at work and maintaining social distance apart from frequent washing of hands with soap.

Those who open the workshops were asked to strictly follow the full sanitization of the area frequently and keeping the rest of the work-space tidy. It is expected that the discipline of 25-day lockdown will hold them in good stead. Telangana State differed on the agenda.

The State has a distinct place in the economic space in the country. Telangana's Gross State Domestic Product (GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 13.40 per cent (in Rupee terms) to Rs 8.67 trillion (US$ 126.81 billion) between 2011-12 and 2018-19. At a CAGR of 16.00 per cent (in Rupee terms), tertiary sector has been the fastest growing sector from 2011-12 to 2018-19 and accounted for 63.68 per cent share in the overall GSDP. As of November 2019, the total installed power capacity of Telangana state was 15,855.87 MW. Out of this, 8,103.65 MW was contributed by state utilities, 5,637.37 MW by private utilities and 2,114.85 MW by central utilities. The second reason for a possible smoother stand is the very confident way in which the State has been tackling the pandemic. A dedicated war room to monitor the cases mandal-wise has been set up right under the glare of the CM.

Agriculture and allied activities have merited the required relaxation on lockdown norms ahead of every other State and the Union Government. Even procurement of paddy and other major crops of the State are receiving active attention. The State also merited appreciation of the Union Government in handling Covid-19 in exemplary manner.

As revealed by the Chief Minister, four districts are free from Covid patients. The intensity of the attack is more localized in Hyderabad Municipal Area and the Greater Hyderabad has already been divided into red and hot zones with intense policing and strict adherence to discipline.

Districts are gradually turning to near normal , which according to his press review, are having a better doubling rate (10days), death rate (2.44% compared to 3.22% for the whole country) and recovery rate of 22% and a larger 354 test rate per million. The State, after seeing the sudden upsurge in Suryapet district, doubled the quarantine period to 28 days, again the only and the first State to take such decision.

In and around Hyderabad, pharma, medical equipment and relating packing and packaging are any way allowed to function even before the relaxations. They are all working to around 50 percent capacity.

MSMEs are the lifeline of the economy. The State has nearly 70000 of them and the most in micro and small sector with nearly 4 lakh employees. Therefore, allowing them to work in two stages - normal districts, near normal, which may commence after a week (27^th May), the State would have many micro and small enterprises from near extinction post- Covid.

Some events have no history; but they create one like the Covid-19 attack that has levelled 210 nations in one stroke. Globe turned upside down during the last two months. In the whole crisis, India of 31 States with several of them having specific strengths in different manufacturing and production spaces has a great opportunity having already become a savior of 55 Covid- 19 affected nations.

Efforts to re-invent our Health sector are already on way with the decision of converting Gachiboli Stadium Temporary Covid-19 hospital into an advanced Health Institute. It is the Hospitals, doctors, nurses, health workers, scavengers, Defense Hospitals, army doctors and nurses – all in the Union and State governments that quickly rose remarkably to the task and rescued millions of lives, where the America failed. With no offence meant, private sector was nowhere near the task.

Telangana’s ability to leverage its strength and create a huge health infrastructure in government that would create new supply chains and new value chains deserves aplomb. It has unique place again in producing vaccines very successfully and CCMB is actively working on a new vaccine along with quite a few others. The other investments that attracted the globe are aerospace, defense, ITeS and Biosciences. Disaster management could be the new strength of the State.

It would be appropriate if the State would review its decision and release the lockdown in stages in districts next week and in GHMC areas during the first week of May 2020.

Drive out Covid-19

                Hell is Hell in COVID-19;
                Wearing mask is your devoted task; 

               Staying at home is your comfort;
               Social distance is your most wanted proximity;
               Driving out Carona is road to Heaven;
               Live like a king and help the popper. 
               Think rational and act national.
                     Author: B. Yerram Raju

Lock down to Continue

The Lock-down to Continue or Not?

B. Yerram Raju*

Lockdown declared on 25^th March 2020 has proved reasonably effective in India due to the two important initiatives: social distance and staying at home apart from wearing masks while going out for any emergency. The lifeline was kept alive – all emergency services, food supplies and medicines are kept available at the hands of the citizens. Police, Doctors, paramedical and sanitization staff have been rendering round the clock. Still, a few violations are seeing here and there and they are being tacked as they should. Even new ‘Normal’ has to wait for a long time. Precaution continues as philosophy of life.

Hon’ble PM Modi asked for suggestions for staggered lifting of lock out and your team should be working on it. CM KCR in a very detailed press conference clearly voted against opening the Lock-out now. In Telangana, people will obey the CM direction without demur.

There could be several other States wanting a partial lock-down till June end to fight the Covid-19 effectively. In such case, it is imperative that we should ensure that the spread is prevented effectively even during the lock-down. Even if lockdown is opened with the precaution given below, it should be re-imposed after five days for a period of one month. During this period, those in home quarantine and several hospitals should be supplied the masks and aprons. All Small enterprises should be permitted to refurbish their machines for production or may be permitted to go in for production of covid-combat materials where they can.

My suggestions for meeting the eventuality of lifting lockdown are:

1.             All schools, colleges and technical education and management education institutions shall remain under lock out till further notice.

2.             Lockout should be lifted every day between 5am and 10am and 4pm to 7p.m.

3.             All religious centres, temples, public offices should be kept open between 5am and 7pm.

4.             Only 10 percent of liquor shops with special approval from the concerned authority may alone be opened.

5.             All Malls should be opened between 11am and 5pm who shall ensure social distance for purchase. Any mall found crowded shall be ordered closure instantaneously.

6.             All public transport duly sanitized may be allowed occupation only to 35% extent to maintain social distance among commuters. The buses should stop only at the specified bus stops and not everywhere on the route.

7.             All Senior citizens, citizens with deformities and women should have separate transport facility. The mini school buses should be used for the purpose.

8.             Metro to colonies connectivity should be arranged through commissioning all the school and college operated private fleet with tariffs well displayed.

9.             Inter-district movement should be restricted between 6am and 6pm either side meaning thereby that the terminal time to reach is 6pm

10.          .All Rythu Bazars should function as now – with 2 hours a day in the morning.

11.          All goods transport across districts shall be given entry up to 8a.m into the city and all goods transport may be permitted to start at 7pm in the night. At each checkpost (may have been abandoned, tea stall may be allowed for the truck drivers to make use of. They should be provided special facility.

12.          All sick persons or patients of any disease other than Carona should be allowed free access and they should show their ID and mobile communication from the Doctor to consult or take medication.

Supplementary list:

1.    No restrictions on movement of dead bodies during any time of lockout for purposes of funeral rights.

2.    The already opened windows for vegetables, fruits and essential commodities and medicines should continue.

3.    Transportation:                 

4.    Any auto should not carry more than two; no motorcycle should carry more than the driver;

5.    All cars whether government or private or taxis shall not Carry more than two persons with masks in the rear.

6.    All sanitized buses public or private should carry one third of the capacity with everyone wearing masks.

All these vehicles shall be sanitized for every trip before boarding new passengers.

7.    All trains should allow only one third of the capacity in all three tier coaches. All coaches should be sanitized every eight hours and washrooms kept clean with hot water cleaning of the commodes.

8.    Offices can operate between 10 & 4.

9.    Factories can work 2 shifts following due precautions. The shop floor supervisor of the shift shall make sure that the toilets and wash rooms are clean, loaded with the required sanitary materials, with clean up every two hours. All employees, labour, executives shall wash their feet before entry and  sanitize their hands both while entering and exiting.

All enterprises should display Cleanliness is Godliness and saves their lives.

Exceptions: -

Companies' staff with ID's and vehicles should be permitted to travel.

Postal service/couriers and electricity and telephone maintenance staff should also be permitted from 6am to 9pm.

Extraordinary times require extraordinary solutions and require tolerance and forbearance. The country so far, has handled the situation exceedingly well and it is our duty to keep the protecting staff in good health. Stop spitting in public; wear mask when outside; maintain social distance and keep clean.

*The Views are personal and the author is economist and risk management specialist.

https://www.thehindubusinessline.com/opinion/should-the-lockdown-be-lifted/article31287496.ece

Coping with post-COVID-19 Disruption

Coping with post Covid-19 Disruption

Post pandemic prediction can’t be a soothsayer’s job. Preparing the economy from a tremendous shock and staying inside home for nearly a month in some States and could be longer as we see the accelerated rate of spread of Covid-19 hit persons, is the biggest challenge. India is not a city state like Singapore or Finance hub like Hong Kong. The optimists expect the lockdown to be lifted by the 14^th April while the less optimistic put it to the end of April. We need to think of the strategies and actions phased over short, medium and long term with matching resources right now. This should be both sectoral and geographical specifics.

While we are the leading global pharmaceutical suppliers, the low and inefficient health sector management with historically low outlays suddenly got the awakening call with the CVD spread and the need for public health systems to step up their capabilities. Yet, the call of the nation has been very ably responded to the greatest consternation of the rest of the world.

The country, with diversity nowhere else existing, is the biggest challenge and opportunity to the governments. Diversity has capacity to cross hold risks across segments and has innate resilience when calamity befalls. It also provides scope for innovation as people think more actively under pressure than leisure. When none can be in laid back comfort that existed before, people keep working out differently different things. For example, there have been more webinars during the last one month than during the last six months. There have also been more video conferences and skype calls as people started working from home. This may gradually turn out as new order of functioning.

One of my nieces from Bengaluru tells me that as Director of a Union Government organization working from home became a true challenge as deliverables rest with her than with other members of her team. Even the forgotten kitchen started demanding her time with children demanding newer tastes and new dishes. This is making her work for 14 hours instead of 7 hours in office. There is a whole paradigm shift in the work environment., not for one but many like her – with no gender discrimination.

What would be the future like? Very many organizations could find new economies of scale in a combination of work from home and work at office. More factories will have to think of reworking their supply chains that thoroughly disrupted due to the CVD, New leadership paradigms emerge. The 10 percent manufacturing small enterprises manufacturing gloves, sanitizers, masks, medical emergency kits to combat CVD will find near extinction of such market. They should expect this to happen and therefore prepare from now on the way to re-engineer their process to newer products and new markets. They will notice that institutions and persons that were after them during their need will turn their faces and likely to hold up their bills in their search for finding cash margins for fresh initiatives.

Our country will have to reinvent itself in workspaces and relationships like never before. In this process, at the micro level, enterprises will re-engineer their production and processes and search for new markets. Many will find the exit to be a problem.

Amidst a supply driven crisis, the unrest and plummeted resources of all kinds, as also eroded markets, MSMEs will require sustainable process consultants to rescue them at affordable costs. Here, the governments in looking at the sovereign dues and the banks looking at the stuck balance sheets of MSMEs should learn the art of turn around management or seek recourse to experts in turn around management.

Every nation will be on the uncertainty horizon. Risk mapping will be difficult. Everyone has been a looser. Non-performing loans will surge unless the thresholds change. Indian regulators need not wait for the world to guide them. They can guide the world. BCBS has already provided for applying the thresholds for SME sector as per the needs of the country. The time for action is now. The threshold should move to a 180day horizon till December 2020 subject to a review after six months. This will automatically provide for higher leverage in lending for the MSME sector, the nerve wire of production that has been contributing 35% of GDP, 45% of exports and employing 112mn persons.

The poor and daily wage earners, the hawkers, the wayside eateries, many disabled, contract workers – both skilled and unskilled, need government subsidies, even salary buffers, supplies and cash to meet their daily needs for at least three more months until the industries and enterprises re-look for employing them.

Fiscal responsibility under these circumstances of both the State and Union governments already hit by the lowest ever tax returns requires out-of-the-box thinking to meet the situation. Several relief funds of the CMs and PM, private donors and even CSR funding even amidst the near 10 percent hit on most corporate balance sheets would be inadequate for revival of the economy. It may take at least nine months to one year to cone to a new normal which would be far less than that we had in the slowing economy.

Even if people have cash in their hands, which itself is doubtful, they will not get the goods and services as the lockdown succeeding the slowdown of the economy, there will be supply driven inflation. Scarcity stares in all areas.

Courage is the watch word. In times of distress people display amazing unity while immediately after normalcy is restored the same set of people will most likely diverge. While the demand to lift the lockdown in toto will surface with more vigor than now, it would be prudent to release in parcels to rework on the efficiency of the health sector infrastructure, doctors, nurses, para medical staff on one side and on to ensure that the wheels of production get back to normalcy gradually, on the other. Second, the discipline enforced should be redirected to finance, transport and manufacturing sectors.

The focus of trade will suddenly think of new protectionism, new direction of investments, newer regional allies in trade and new relationships. The denuded investor firms and the huge number of corporates off-loading the bonds in the markets for liquidity are bound to put pressure on the financial sector. This recession is very unlike the 2008 or even 1930 and it will be a prolonged and widely spread across 200 nations in the globe.

Banks are systems driven and not enterprise driven, Unless the instructions are fed to the system, the concessions do not take effect. In several Banks, even the usual half-yearly reviews of several accounts on a regular basis did not take place. The disaster today is extraordinary and requires extraordinary speed of action post new normal.

At a time when the demand for credit is at the lowest level due to several manufacturing and trading enterprises shut their shops due to lockdown and are seeing future as more uncertain than now, liquidity doors have been kept open by the RBI as though that was the problem area that required urgent attention. Even during the last six months RBI has been extremely accommodative to Banks both in capital buffer and liquidity commitments. But the credit did not move to a higher zone in non-food segments.

“These capital and liquidity buffers are designed to support the economy in adverse situations,” as the Fed said in a statement. Fed’s other hope is exactly what the India incorporated is looking for: less rigidity from the banks in extending the required debt, post pandemic. COVID-19 has caused serious disruption to global supply chains and has a huge impact on financial markets and trade ecosystem. It is important to retain the customers and governments post pandemic and rebuild their lost supply chains to operate sustainably.

India’s biggest advantage is its demographics and therefore, the future needs to be addressed with alacrity so that entrepreneurship will not be governed by the hoary past but a bright future.

The Author is an economist and risk management specialist. The views are personal.

Published in Money Life 2^nd April 2020; www.moneylife.in