Covid crisis: Bajaj Auto mustn’t shut the plant, lockdown won’t help

By: |
June 30, 2020 7:30 AM

The consequences of a lockdown will be worse; we have to learn to live with Covid and try to minimise casualties

And, as Bajaj has pertinently pointed out, no company can afford to pay worker’s wages if they sit at home. And, as Bajaj has pertinently pointed out, no company can afford to pay worker’s wages if they sit at home. (Representative image)

Rajiv Bajaj is absolutely right when he points out that the number of Covid-19 infections and related deaths will continue to rise as the unlocking progresses. Despite the lockdown having been extended by most of the bigger states—albeit with relaxations—the case count is galloping; India is now clocking in close to 20,000 infections a day, and the daily count could be at three times these levels in another month or so. In fact, it is not as though the infections were not spreading during the early days of the lockdown when virtually everything was shut. Even in the north-east where the spread of the virus has been relatively better contained, the incidence of Covid-19 jumped 16-fold between May 17, when the fourth lockdown was announced, and June 10.

So, Bajaj’s observation that it is the GDP curve that had been flattened rather than the corona curve wasn’t really off the mark; the lockdowns were needed to be able to build healthcare capacity, but that doesn’t take away from their large economic costs. The unfortunate truth is that the pandemic is worsening even as the economy is weakening. The initial signs of recovery are slowing down, and there seems to be some fatigue. Daily average import duty collections for June, for example, have been flat at close to 65% of the FY19 average, and while road traffic is up from the extreme lows of April, the week-on-week change in congestion levels has been flat or negative. Moreover, the average daily number of e-way bills generated was rising in May, but the pace of increase has tapered off. Unless factories are humming, and malls and markets are open, companies cannot generate revenues.

And, as Bajaj has pertinently pointed out, no company can afford to pay worker’s wages if they sit at home. Prolonging the lockdown is futile and rather than hitting back at Bajaj, as former Maharashtra CM Devendra Fadnavis did—he said Bajaj was neither an economist nor an epidemiologist—governments need to listen. The fact is the scientific community too is grappling with the causes and impact of the virus; even today, it is not fully clear as to how the virus attacks our bodies and immune systems. Governments must realise that unless factories are re-opened fast, it is going to be hard to arrest the deceleration of the economy, especially since there is no big fiscal stimulus as yet; indeed, there can be no stimulus large enough to compensate for factories being shut for long periods of time.

The disruption due to the pandemic and the lockdown of the past few months will see tens of thousands of micro and small units shutting down, and lakhs losing their livelihoods. Businesses in the organised sector too will not emerge unscathed, they too will be hit, and that would impact workers. Governments need to understand the economic crisis could be worse than the corona crisis. So far, they have failed to ensure adequate and affordable healthcare facilities; moreover, those with other illnesses have suffered for lack of treatment.

Moreover, tens of thousands of migrants were left stranded without food and other facilities, forcing many to trudge home on foot. Had construction not been banned and the lockdown relaxed earlier, the crisis would have been less severe. India’s healthcare system is not about to be fixed in the next few months. Leaving the country locked down would mean that resources needed to fight the economic crisis, as also the pandemic, are not being generated. Rajiv Bajaj is right; we need to take the pandemic in our stride and move on.

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