While speaking on the impact of COVID-19 on the economy of India, the co-founder of jabong.com, Praveen Sinha said that it’s economic impact on people is more than the public health. In a recent interview with Business World, Praveen said, “We are relatively in a better situation in terms of quantum of people impacted health wise, but the quantum of people impacted economy wise is much larger.”
Following the 21-day lockdown announcement made by Prime Minister Narendra Modi on 24th March, the signs of adverse economic impact started appearing. According to Praveen Sinha, “Most of the businesses, other than essential services have shut down their operations for at least 21 days or more, and other segments like process industries have been given some exceptions. Now, considering this scale and given that none of the retail channels are open other than groceries, milk and medicine; it is very difficult for other businesses to earn revenue.”
Also the founder and CEO of NBFC firm PinCap, Praveen Sinha, while commenting on the impact of COVID-19 on the backbone of the Indian economy —the MSME sector, said, “MSME’s (are) always starved of cash, be it working capital or CapEx or retained earning, because there is a payment cycle which is delayed.” He also added that as most of them are non-essential in nature and hence their “revenue will almost be zero” and not paying the team salaries at this difficult time will not be a humane decision on their part. He fears that, “If it gets extended, then I think the small businesses especially the ones with tight cash flow before the COVID-19 happened, will probably have to shut down.”
Sinha further emphasised upon the adverse impact of COVID-19 on the sunrise industry of India — the travel and tourism sector. “Travel has been banned, even when we start opening up, there will be restrictions on certain aspects of travelling,” he added. Due to the shutting down of schools and businesses for a number of days, they might decide to do away with the summer holidays (when maximum families go for vacation) , which will directly have an impact on all the stakeholders in the sector, irrespective of them being small, medium or large.
The outbreak of coronavirus has not only disrupted the economic growth of some of the fastest growing economies, but has also put a halt on the global economy. The pandemic has spurred a fear among the investors about the deadly virus destroying the economic growth as in several countries. As an entrepreneur and angel investor, Praveen Sinha believes that just like the aggressive measures that the Indian government took to ensure that the virus does not spread rapidly; if the government forms policies for safeguarding the private sector,(given that many global companies want to diversify and not fully dependent on China for its supplies, India can be promoted and placed as an alternative for sourcing -enabling employment, export and many new business opportunities) ensuring that we are right back on track though it might take some time and not happen immediately