While several companies have been concerned about the migrant labour crisis after the mass exodus of daily wage earners from metro cities, they should be more concerned about getting the consumers back.
While several companies have been concerned about the migrant labour crisis after the mass exodus of daily wage earners from metro cities, they should be more concerned about getting the consumers back, Manish Sabharwal, chairman & co-founder of the staffing and human capital firm Teamlease Services, and Director, RBI Central Board, said at an event organised by The Indian Express. “I don’t think that the binding constraint for employers right now is labour. We can discuss the migrant issue separately, the binding constraint for companies to get back consumers, and the ending of the lockdown,” he said. As coronavirus hit the country, wage earners were forced to migrate to their hometowns in the absence of means to earn and eat.
However, the issue of consumer sentiment also looms large as people remain pessimistic about the job situation and the overall economy. In fact, according to several studies, people are going to withhold impulse purchases for months to come. Consumer sentiment in general remains downbeat and has in fact hit six-years low in May 2020, according to latest RBI data. “Consumer perception on the general economic situation, employment scenario and household income plunged deeper into contraction zone; while expectation on general economic situation and employment scenario for the year ahead were also pessimistic,” it said in its latest survey. India was already grappling with economic slowdown even before coronavirus hit Indian shores.
Meanwhile, the supply chains will also pose a major problem for companies while they battle various other issues. “In the 12 months after the lockdown is fully lifted — because supply chains and distribution chains don’t follow the red-green zones, they will never be fully back to normal till we have a lift-up of the lockdown,” Manish Sabharwal said. In the meantime, the government may look into removing other structural constraints which are holding India back.