Post Pandemic World-An Indian Perspective(Part 1)

The Post Pandemic world can be divided into three parts-:

1. Before Covid(BC)
2. During Covid(DC)
3. After Covid(AC)

What happens to India in the AC world depends on what we do in DC World.In the DC world the challenge for India is a two fold objective of protecting lives from virus and protecting lives from loss of livelihood.We have to walk a tightrope balancing these two things.We have to do whatever it takes to make sure that we maintain the balance in the DC world.

Now coming to the AC world, we have to immediately focus on prioritizing investing on the following three sectors on a short term to medium term-:

1. Healthcare
2. Education
3. Mother Nature.

When it comes to healthcare,India spends a paltry 1.3% of its GDP.Looking at other countries, Germany spends 10%,United states spends 14% and even China which is 4 times bigger economy than ours spends 3%.Now this must be changed.The excuse given by Indian Policymakers is that we do not have the fiscal space and when the time will come we will increase the allocation.For all these years, it seems the time has never come, but this no longer can be brushed under carpet and needs our highest priority. We have to spend in entire healthcare industry in areas like sanitation,hospital infrastructure,nurses,doctor,tele-medicine,rural medicine etc.

Education is again where we are under spending.We have to go all out post the Covid world and invest and build this sector,boost this sector.

Finally Mother Nature.The Sustainable growth and development will not happen automatically, it must be worked upon.It cannot be taken for granted. This cannot happen without active action.Whether be it Covid-19 itself,Cyclone in the East coast,West Coast ,Increased Locust attack, the cost of Ignoring nature is increasing and we need to maintain harmony with the nature.

Where can we see Corporate India fitting into this?Everyone needs to step up here ,Government and Corporate sector as well.There needs to be proper planning for it.Government has to step in .The most important thing that we are currently lacking in our Public and Private healthcare sector is trust.There is still a Psychology of suspicion.It is here that Business and Industry must step up,build the customer trust and make it profitable and viable.

Nowadays common man is dealing with all kinds of medical care. We know that Government medical healthcare does not work that well. This is very much evident from the fact that when the Delhi minister got infected by Covid-19, he preferred private medical hospital for treatment. Now there is a question of quality of Private medical care.Has the private medical care excelled itself or there is much left to desire.

There is lot of ground to cover for private healthcare. When we go to private healthcare, one is asked about whether he has appeared out of individual capacity or has the backing of Mediclaim policy.If there is a case of mediclaim policy the patient is charged more.It is unfair as when one is providing a service it should not matter whether one has Mediclaim or not and fees charged should not depend on that. Services provided has to be fair and transparent when it comes to pricing .Secondly there has been cases where Covid-19 patients were charged much higher putting them in undue stress and anxiety.Making money and profitability is acceptable, but profiteering and taking advantage of people under stress is unacceptable. If these issues are resolved and confidence can be built , then in medium to long term the size of investment and return is enormous. If the government does not have the fiscal space to spend , then Private sector needs to step in.Just like in the Banking Sector where customer shows deep trust and confidence on the institution before putting money in fixed deposits,that trust level and confidence also needs to cultivated for hospital ,clinic doctor,nurse and healthcare institution for fair treatment and protection for health.It is just like handing over the keys of life to people whom we have never met. And over 3 years we should target to increase the healthcare spending to be double the amount of what we are spending now. This is a huge opportunity for business and also the Government needs to increase the Spending.For this to happen Government needs to look at how much money it has and carefully spend it as the amount is limited which needs to used judiciously.

Not only we have to increase the percentage of GDP spent on healthcare but also increase our GDP itself at a much higher rate but how can we do that?

We have to be clear about some major changes and aware about them now as I write.The immediate task will be to learn to balancing between physical world and digital world.What we have seen is digital world tends to be far more productive ,less personal and more surgical in nature.

The Customer is deciding the choices.He decides whether to shop online or from store.It is not a business decision,or a Govt. decision, it is his decision.Recognizing this shift .We have to re-balance the physical and digital world requirements . in the BC world around 80-90% business were run in the physical wold,and 10-20% in the digital world.However today in the DC world we are seeing quite the opposite with 90% business being run in digital world and 10% being run in the physical world.But in the future there is going to be a 50% balance between both the physical and digital world.It is this transformation that will have implication on economy and business models, travel,tourism spending habits,technology,artificial Intelligence.All these will change the levers of where economy will grow.

Another relevant issue, is the issue of re-skiling. As we see, a lot of people will be displaced from their normal jobs.How are we going to handle that?This is one of the issue we need to address.Then we have to think the future of jobs,the safety-net around jobs .Finally in terms of Economic growth there are four levers of economic growth.1. Private Investment 2.Consumption 3.Net Exports and 4. Government Spending. For the last few years India has disproportionately depended on Government Spending for our economic growth. Time has come for us to spur private Investment and we have to rekindle the animal spirit of Entrepreneurship which we Indians always historically had.

Now the next question comes is what the Government has to do to awoken the animal spirit although we have to be careful about rising the spirits of right kind of Animal. Tiger is one kind of animal and a dog with its tails around its leg is another type of Animal.

Of the many Animals, India is Like an Elephant.The Indian Elephant Lumbers but walks steadily.It has to walk little faster.Most important is Government and business must build it together .At 125 years Anniversary of CII , PM Modi has said, that we his Government will work with business and see how together we can bring back high economic growth.The time has come for us to push for growth as a necessity and non-negotiable .

There has been a report from SBI stating that there will be a decline of GDP per Capita by 10-12 % in India’s richest states.What steps can India take to Mitigate this , given the economic ramification due to the ongoing Border Clashes and the Covid Pandemic.

This can be seen is the context of Rural-urban Re balance . All our lives we have looked to Migration from rural to Urban.This happens due to aspiration,for growth prospects. But if we ask that as the migrants came over the last 30-40 years , what did they get in the cities?

1. They lived in a slum or a Chawl. 2 .Average 500 persons per toilet.3.The jobs they got were unsecured ,daily wage jobs 4. Now the virus risk was much high in urban India compared to Rural India.And these poor guys have fled back.It is now time for us to seriously look at this humanitarian issue and convert this crisis into an opportunity.Thanks to Broadband and Internet, there is Connectivity, we can be sitting anywhere in India and from that place the world can be our oyster.We can look at Google as an example in America.They are hiring people to work from home from any part of America,with engineers getting a 200,000 $ salary sitting at home working for Google.

What we can do is, we have to make sure that engineer, working from home sitting at home need not be in small Town of America .He can be from any small village or Town in India.How can we transform this to make sure we have the skilling and quality of people?We have got two opportunities -: 1.Jobs are moving from China.India must grab manufacturing. We have to do a lot more to grab that. Our Prime Minister’s vision of “Atmanirbhar” Bharat is a competitive Bharat engaged with the world, not a protectionist one.2. We have another bigger opportunity to become office of the world.Not just the Back office, but the front office.The best of our engineers can be anywhere in India serving Indian customers or global customers and it makes no difference in the world of connectivity.We have to Redefine the future beyond geographies.”Geography is History.”

If we look closely at “atmanirbharta” it does not stand true of being competitive in the world.The Government steps like raising tariffs across the board,seeking country of origin,putting more barriers to foreign investment looks very much protectionist.Whatever be the Intention of PM Modi , translated to the paper it looks like Be an Indian,Buy Indian.

There is no problem in being Indian and buying Indian but we need to be quality Indian. Buying at the right price not at a higher price.We have to make sure that by applying tariffs our citizens don’t end up paying more ,as this will again lead us back to the premier padmini era of the 70’s.

There are two Counters to it.1. In many countries we are observing a phenomena called state capitalism. This means State is interfering with the market pricing of many goods.If we have an unfair field,where states have manipulated the pricing of particular products, then in that case it is not free,fair and open competition.We have to ensure first that the markets are free and fair, and if they are so , then our businesses must become competitive rather than asking for price protectionism. But if it is not free and fair, we cannot hurt our business because somebody is subsidizing something at some level which we are not aware of.The price manipulator by an exporter into India is what we should take care of.And unfortunately some Countries including china for some time has been indulging in predatory pricing for establishing a market,kill all Competitors in the market and then establish dominance.We must protect our business not against free trade but against unfair , subsidized,manipulative Competition.

The Next issue is how can we prevent Chinese Investments in Indian startups and have startups completely made and financed in India?There is a view point that there are Indian startups who have investments from china and are seen to gain a monopoly over the market.

One of the priority sector for Indians should be risk Equity Capital going into Venture.Now whether that support comes from RBI or Government of India or from any form of state support is fine.We have to develop risk capital base of Indians in India .We have seen a great development in stock market, where equity mutual funds have come of age.We need similar kind of development in private equity,alternate Investment funds,strong saving boost of India savers going to risk capital of well governed Entrepreneurs.Challenge in India is we have the Entrepreneurs but we need top quality Governance.

To maintain a good governance , the head of the firm should not focus on the majority stakeholders only but look for interest of all the stakeholders,especially the minority ones.Suppose if a person owns 99 percent share of the firm , then he has to think of the 100 percent of the shareholders .When one is running an institution, the trust needs to be built that he is running the firm for 100 percent of the stakeholders and just not for a majority part,not a significant part.If the Indian DNA gets this simple principal that I am a trustee for 100 percent stakeholders not just for 40-50 percent of the holding we would have got the answer.Because there have been many cases of mis-governance that we have several rules written on it but the rules has to be supported by spirit which comes from people and culture.

We will continue with the next part for further issues that India is facing currently or would face in the upcoming future and how it can tackle them , mitigate them,convert them to opportunity in the Post Pandemic World.