Time to Refresh

The most refreshing news this weekend is that the government has finally announced the so-called Unlock1 series of lifting the lockdown restrictions.

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India is finally easing up the restrictions imposed after almost 70 days of lockdown. These partial relaxations will send a lot of positivity in the days to come. The situation among people is that no business has happened due to lockdown, and if they are careless, the disease can grip anyone in its fold. So either way, we are in a dangerous situation.

So why is government relaxing rules now?

Many people have been criticising (many just for the sake of criticising) that when the cases were under 1000, the government announced a lockdown without any notice for 2 months and when the cases are reaching 2 lakhs they are relaxing the rules.

  1. Had notice been given, lakhs of people would have moved to their homes and other places taking the disease with them and we would have been left without any way to trace them.
  2. The medical infrastructure was not in place, and hence the spread would have gone out of control with no one having any clue what to do.
  3. Possibly we would have reached a crore of cases by now.
  4. These two months gave the states to build up medical capacities.
  5. Those coming in and going out of a place are now easily traced and quarantined.
  6. Lastly, people have come to terms with Corona! We know we have to live with it and have to take care of ourselves.

Now the government is transparent, and the people are clear. We know which are the containment zones. Not that the virus is going to stop spreading, those not careful will pay the price. We at VRIDHI request each one of you to cover yourself with a Health Insurance plan. VRIDHI can help. Billing of Rs.5 Lakhs is standard for treating a corona patient today. How many members are there in your family?

I have been interacting with businesses regularly. After the relaxations, some have started doing 20% of volumes, and some have reached 50% of their pre lockdown volumes. The battle is long-drawn, we are not going to live normally until the medicine is found. But yes at least we are moving from ICU to the general ward on June-8th.

Economic Package and Stimulus.

Again a lot has been spoken and written on the 20 Lakh Crore push announced by the govt. Some people are born cynical. I can understand that the opposition has to criticise the govt, they have no other option, whichever govt is at the centre will be criticised by the opposition. The sad part is even the so-called intellect, who actually know the facts speak negatively.

Narrative has been propogated that the government should deposit cash (it has been done for BPL families) in each citicens account. That’s called an Economic Relief and not Stimulus. I call it A Dole. Any freebie is not good and should be avoided.

What about India’s Ratings?

Even if the government wants, they cannot deposit cash in accounts. Remember, in 2013, India was classified as a Fragile Five country? We were just a step away from the Junk rating, and that is the reason despite elections in 2014 the then government had no option but to steeply hike the fuel prices.

Now, as yourself how big the problems could have been had, we touched the Junk Rating that the government had to make people unhappy and increase prices of fuel and many other actions taken on the economic front. Their response tells us the consequences, and let’s not go into more details. Junk Rating would have been a DISASTER for the country.

Since 2014, India has been lucky on low crude oil prices. The government has done a great job by not passing the benefits to the public and repaying the loans taken by the previous government; thus, our rating went up by one notch!

Thus, we cannot call for a disaster again by doling out cash relief which will reshoot the fiscal deficit, and we get back to the 2013 situation. I should say the government has done a better job by guaranteeing the loans so that the companies start functioning again and we don’t stare at mass job cuts.

So, friends, we are on the right track. Yes in a state of pain everything looks useless to us, but then we got to get practical. We cannot kill a hen to take out all the eggs in one go.

The market has been anticipating relaxations and showed positive signs during the last two working days. I will update further after seeing the movements. So please stay connected to the site. Click on the Email Subscription and keep in touch.

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Vivek Karwa

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