India Inc warns of social issues if growth does not revive soon

Says impact of Covid-19 on livelihood severe, believes health could be the next IT

Industry has cautioned the government that economic recovery needs to \return quickly or else social issues would arise following the severe impact of Covid-19 on the livelihood of the poor.  

Sanjiv Puri, CMD, ITC said the crisis has been unprecedented and of epic proportions. 

He said the economic fallout has been very severe as the International Labour Organisation (ILO) estimated that four out of five of the world’s workforce will stand in immediate danger of having their livelihood destroyed.

"We have to realign ourselves to the new normal. The faster we adopt to this new normal, the better it will be. The longer we take to revive, the greater will be the stress," he said. 

Puri highlighted that there is need for extreme amount of compassion and empathy in dealing with millions who have lost their livelihood. 

"We have to now look to the future. We will now have to pick up the opportunities, demonstrate our resilience and move forward," Puri said.

As the theme of the CII’s 125th Annual Session is to get growth back, the CEOs emphasized the need to bridge the gap between policy articulation and implementation. 

“We need to move faster on implementation part by strengthening institutions, invest in brand building and address growth,” said Ajay Piramal, chairman of Piramal Group. 

Piramal feared that if the growth is not brought back urgently, social issues may come up. 

The captains of Indian industry said since the current crisis has emanated from a health crisis, India has an opportunity to further boost the health sector and become the global leader. 

“The health sector has the potential to become what India has shown to the world in the field of IT sector’, said Kiran Majumdar-Shaw, CMD, Biocon Limited. 

She said the health sector is employment-intensive and has great export potential. 

She expressed optimism that science and innovation is now getting proper attention as the Government is seeing importance of investment in this sector. 

Uday Kotak, managing director and chief executive officer of Kotak Mahindra Bank, said, “Unlike the 2008 financial crisis, the ongoing one has originated from health-related issues that turned into a financial crisis. Thus, the ultimate solution to this has to come from solutions in healthcare system."

The biggest hindrance today any business or societal activity face is scanning the health of the people involved in it, he said. 

"If we can find an easy solution to test and ensure a person is not infected by coronavirus and is fit for work then employing them in daily activities becomes easier," said Kotak, who is the incoming President of CII. "Further, we need to increase the number of tests daily – to a million from 100,000 level – to fast track resumption in business activities." 

Infosys co-founder Kris Gopalakrishnan spoke to two other panelists about the different ways technology has made a difference during the ongoing pandemic and how some of these will become accepted norms going forward. 

They also discussed the need to evolve policymaking and regulations.  

"Our fight against the virus has been centered around science and technology and therefore, global collaboration for effective scientific policy and incentives is needed," said Gopalakrishnan, who is also chairman at Axilor Ventures. 

He added that regulatory policy should evolve such that technology favours not just white collar workers like it has done during the pandemic, but also blue collar workers who may not have been able to stay at home and work.

"In Israel, we took three steps to fight Covid-19 crisis ... fighting the pandemic, fighting economic crisis and be ready for the next pandemic because the question is not if, but when the next pandemic would come," said Amiram Appelbaum, Chief Scientist, Ministry of Economy and Industry and Chairman of Israel Innovation Authority. 

Talking about the need to have efficient power supply for everyone, K VijayRaghavan, India's Principal Scientific Advisor,  said in the longer term evolution of power transistors which permits powering devices at low voltage should be available to everyone. 

Kotak said,"The Covid-19 outbreak and resulting lock-down has impacted adversely the real economy, businesses, individuals, the government and the financial sector," he said.

He said while the government is facing the risk of higher fiscal deficit, the banking sector urgently needs the recapitalisation to the tune of Rs 3-4 trillion to meet the lending requirements. 

However, India Inc said the manufacturing sector is still facing a lot of challenges on several fronts, particularly due to bottlenecks in infrastructure, be it power or roads.

“To revive manufacturing sector in India, we need to put in place more enablers as only quality infrastructure can help create world class manufacturing”, said Rajnish Kumar, Chairman, State Bank of India. 

He also underlined the importance of investing more in agriculture sector as the capital expenditure in this sector is stagnant. In services, there is a need to focus upon construction, which is the next major employer after agriculture in India.

Janamejaya Sinha, Chairman of The Boston Consulting Group India Private Limited said there is need to increase testing to get the fear out from people’s minds. Also, there should be learning to live with a slower economy in the near term while focusing on improving productivity over the medium term. 

He said infrastructure works under the National Infrastructure Pipeline (NIP) announced by the government earlier should be expedited.

Johan Swinnen, diirector general, International Food Policy Research Institute said that their analysis shows that almost 150 million people globally might fall into extreme poverty due to the Covid crisis of which two-third will be in sub-Saharan Africa and a significant number of people will be in the Asian region as well.

He said that in some places, calorie consumption is being met but not the nutrition levels that has gone down during the crisis, as people are not able to meet their daily requirements.

(with inputs from Arnub Dutta, Sanjeeb Mukherjee and Neha Alawadi)