Lock Down

Corona has hit. Often this is labeled as the disaster of the century, as it crosses national, political, religious and any other human border one can imagine. Since its humble beginnings in Wuhan in China, it has crossed to over 150 countries and has taken over 23,000 lives as on 27 March 2020. The entire human race is behind closed doors across several countries in order to ensure "social distancing" - as the key to fight the virus that has virulently fought to keep its presence by the act of few who become the detonators in local communities. Doomsday sayers have  written off part of the human race, and the global economy seems to be shrinking. Politically, whether one is left or right, it doesn't seem to matter any more.

The schools closed first. Then the malls. And soon the whole nation shut its doors. There have been several good examples and a few bad in the process. The way people have been organized to do shopping in grocery stores in West Bengal state has been praised across the globe. Several other states India have replicated it with some twist into the thing. News has come in that the Indian railways plans to convert each coach of trains into isolation wards - which enables every coach of train can be converted to a 10 bed separated mini hospital. More clarity needs to emerge on how they plan to keep electricity to be running 24x7 and with the summer arriving, will only the AC coaches be converted into such isolation wards. But, the thought is good and important. India is aggressively looking to contain the disease as we are moving towards the first 1000 of the patients.

There are also some gaps in the initial days of this national lockdown that began in three days ago. One serious gap is in ensuring supply chain for grocers. This needs exceptionally clear plan as materials have to move from farm to homes without break. Personally I feel that we would have this lockdown extended as the number of cases in India continues to rise, and we get better control of it and be in a position to prevent the spread in a month or so. This means, we need to short-circuit the supply chain. Materials should reach from farms and large warehouses to groceries across the country without going through too many human hands to reduce  infections. One way could be combining the logistic capabilities of Coke, Pepsi, Haldiram, Hindustan Unilever, DHL, DTDC etc and state specific major supply chains such as Modern Bread in some of the states for delivery up to grocery stores, along with utilization of Swiggy, Zomato and UberEats for home delivery exclusively for senior citizens.  Any of our software majors can come up with a platform which can be utilized by all stakeholders to ensure smooth flow of groceries and vegetables on which the above mentioned supply chains can operate along with State administrations. People falling hungry can have huge social impact and may give way for unrest. Better that we put in some effort on this.

After all, children can't go hungry. And children can't wait.

Retail and FDI

India is looking at allowing Foreign Direct Investment (FDI) in retail markets. India also hopes that this would lead to creation of at least 4 million jobs, and the investment has to be to the tune of a minimum of 100 million US $. So, with this India expects huge inflow of foreign retail marts to start huge stores across the country-- from Wal Mart to Burger King, everyone will be looking into tapping the 600 billion $ Indian retail market ! Although I am personally in favor of opening up the Indian market, certain things seem to hit hard the Indians. And I am afraid of this one too.

Let us start with the first assumed benefit: 4 million jobs in the country, with possibility of another 4- 6 million jobs in allied services. Well, but how many will lose jobs because of this? That one is answering. Few years back, when Pepsi and Coca-Cola where allowed into the country, initially they were allowed to sell drinks in a bottle of 500 ml or more. Now, that meant, keeping the local companies live, including many who were making cool drinks from their own homes, and were selling in the local market in container bottles of 180 ml and 300 ml. Then the law allowed these giants to sell 180 ml and 300 ml bottles as well. Suddenly, the home based entrepreneurs and small vendors vanished! Even my own brother lost business! When I asked him three years ago why his business was going down, he said this as the reason. Now, his business is fully closed, and is unemployed. I do not know how many extra people Coke or Pepsi employed. But I know that some people lost their livelihood too.

During my trips in Eur0pe and the U.S. I have heard some of my friends saying how small shops cannot do business because everyone goes to the big shops, the super-markets to get things cheap, make their own choice and ultimately....leaving the small time vendors heart-broken. I am apprehensive of this move of the government.

The second presumed benefit is, if more money flows in, then inflation would come down! That is really funny. How much of inflation came down with the first round of reforms in India? 3 - 4 percent? But then it went up again. It is now hovering around 10-11 % Cost of basic goods have gone up. Gone up skywards....

What we need today is agricultural reforms--a second green revolution, that benefits both the farmer and the consumer. There are too many middlemen surviving on the farmers' plight and consumers' woes. This must end. Now.