Declared a pandemic by the World Health Organization, COVID-19 is now active in over 199 countries and territories and has registered 722,350 affected cases so far, with the death toll crossing 33,980 worldwide (as of 29th March, 2020). Several countries have been put on lockdown to stem the spreading to the next and severe stages of coronavirus. The Prime Minister of India, Narendra Modi declared a nation-wide lockdown for 21 days on 24th March 2020 to combat the trajectory of the infectious disease. With the COVID-19 cases reaching 1,024 mark and death toll reaching 27 in the country (as of 29th March, 2020), immediate measures are being taken by the government and healthcare sectors to flatten the curve as soon as possible. The Union Ministry of Health and Family Welfare has directed the state government to set up emergency centers to help and destress the citizens during the lockdown. Though India is currently at stage 2 of the COVID-19 pandemic, there’s a fair chance it might enter the next stages of coronavirus if immediate and crucial concerns are not addressed.
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Businesses have shut down; companies are opting for remote working and have asked the employees to work from home. PM Narendra Modi has also appealed to the companies to not lay off employees or put salaries on hold amidst these trying times. However, the lockdown has struck the Indian organizations the most and has almost battered the economy to the death bed, especially small-scale factories that depend on monthly turnovers for salary dispersal. This only raises the question that if India was to enter the next stages of coronavirus, are Indian companies prepared for the potential economic perils that the COVID-19 has in store? And what measures are the government and corporates taking to combat the same? But before we find answers to that let’s understand what are the four stages of coronavirus to comprehend the effects of the same on Indian companies and the economy.
What are the four stages of coronavirus?
Stage 1
Every country that registers its first affected case is inadvertently on the first stage of coronavirus. These are imported cases where people who have travelled to infected countries or are from infected countries introduce the virus to the locals. They are less in number and easy to track. The virus transmission can be curbed at this stage. For example, despite sharing borders with China, the transmission of the virus in India was delayed due to the early-on decision to halt inbound flights from the neighbors.
Stage 2
A country has entered the second stage when there are cases that have been affected by the imported cases. These are usually relatives or individuals who have come in contact with people with a travel history to infected countries. The transmission is local and it is possible to track the trajectory of the virus. India is currently battling to stay on this stage of the coronavirus pandemic. With the nation on lockdown for 21 days and social distancing practiced all over, the Government and healthcare sectors are striving to flatten the curve. The Ministry of Health and Family Welfare pointed out how the corporates and private sectors are also stepping up to support the coronavirus lockdown.
Stage 3
When large groups and communities are affected, and when it’s difficult to trace the chain of transmission of the virus, then the country is declared to have entered the third stage of the coronavirus outbreak. This means there are cases who despite not having any travel history or contact with those who have a travel history, are affected. During this stage, the outbreak is on the verge of widespread and difficult to curb, for example, the situation in Italy and Spain at the moment. Hence, a lockdown becomes the need of the hour and the only option to reduce potential cases.
Stage 4
Stage four means endemic. The virus is widespread and irrepressible. The fourth stage is when the virus outbreak keeps resurfacing in some countries throughout the year, such as the case of malaria or dengue in India. This is a stage that the Indian government has taken into account in its plan to tackle the virus, the IE report states.
How will the stage 3 of COVID-19 affect Indian companies?
India continues battle stage 2 coronavirus pandemic with companies and businesses partaking in the lockdown. The worst-hit being small-scale industries and factories or MSME who are approaching the government for a moratorium in case the country ascends to the 3rd stages of coronavirus outbreak. Coimbatore District Small Industries Association (CODISSIA) for instance, has approached the government for a moratorium of six months for micro, small and medium enterprises (MSMEs) in case there are defaults in payments or they are unable to revive their enterprises post the lockdown.
Since running the industry during these pandemic stages of coronavirus is a risk to health and finance, the MSMEs who are hailed as the backbone of the economy, are raising the question of how will they pay their employees with the business down? The money in the MSME industry rotates on a daily or weekly basis and if the country were to enter the 3rd stage of coronavirus, the post-pandemic situation looks alarming for small-scale industries and some may even not survive. A major challenge would be to revive the enterprises that would take more than three months and also to continue paying the employees during this period. The MSMEs of Coimbatore have approached the Government of India and the Finance Minister with a letter of moratorium that primarily focuses on suitable instructions to be given to the banks to relax charges on loan, other dues and also requested the Reserve Bank Of India to halt banking transactions for the MSMEs for the said period. Lest we forget, the collapse of this industry will inadvertently affect India’s dream to achieve the $5 trillion economy by 2025.
How are the Government and Corporates aiding the economy during COVID-19 lockdown?
Foreseeing India’s looming financial crisis in case it hits the next stages of coronavirus, the Government of India declared packages and immediate measures to ease the effects of COVID-19 on poor, private sectors and corporate organizations. Finance Minister of India, Nirmala Sitharaman announced the deadline extension for filing income tax for the financial year 2018-1019 to June 30, 2020 as well as the reduction of compliance burdens on companies to tackle coronavirus lockdown. The multinational corporates and several private sectors have also come forward to help the Government with the ongoing crisis.
Reliance Industries has donated 5 crores to the Maharashtra Chief Minister’s Relief Fund and announced the production of face masks and safety suits for workers across the country. Mahindra Group is offering to make ventilators, which are in dire need for the healthcare sectors. Several CEOs are donating their monthly compensation as well to battle COVID-19 pandemic. Besides this, they are also ensuring that no salaries will be deducted during the lockdown period. Tata Steel for example, introduced a special leave for the employees wherein they are entitled to full pay and no cuts in the annual or sick leaves irrespective of whether they are affected or not affected by the virus.
So, are Indian organizations ready for stage 3 COVID-19? Only time will tell. With economists alarming the national leaders of the looming financial crisis, the Indian companies are sure-fire to take a hit if the country enters the next stages of coronavirus. Being on a 21-day lockdown, the nation waits in anticipation as the government strives to curb the pandemic outbreak.
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References:
- Coronavirus Outbreak: What are the different stages of a pandemic? Financial Express – 23 March, 2020
- Not all SMEs will survive the Covid-19 crisis, but what should an economic bailout package look like? India Today – 26th March, 2020
- Not all SMEs will survive the Covid-19 crisis, but what should an economic bailout package look like? – Economic Times – 27th March, 2020
- Coronavirus: ‘Special leave’ to ensure isolation doesn’t hit pay – The Economic Times – Rica Bhattacharyya – 18th March, 2020
- Mukesh Ambani’s mega plan to fight Coronavirus: Reliance Jio, Retail, Life Sciences come together to help govt – Financial Express – Prachi Gupta – 23rd March 2020
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