Many people have asked me many questions…here an honest attempt to answer some of the more important questions

1. Will this Lockdown have an imapct on the Economy?

A: Of course it will have. On the Economy. Every person I know has been impacted. Of course my doctor friends are working over-time if they are in the government or private hospitals. You can’t lockdown an economy for 15 days and “hope” there is no impact.

1. Has such a thing happened in the past?

A. Not that I know of. Even during the Indo Pak war of 1971 (which I remember very vaguely) we went to school and my Dad went to office. Yes things were rationed, we had to stand in queues, there was a darkout every night, but hey the economy was not shut down. Also going to say 1929 (depression) and 1944 (WWII) makes no sense, World economies were not so inter-twined. Also this is the first time we are seeing the whole world impacted by one event.

1. Is this a financial crisis?

A. Every crisis is a financial crisis. This started as a health crisis, but the measures taken have had serious financial impact (see answer 1).

1. What will be the impact?

A. It will be quite a bit. From the auto rickshaw / taxi driver not being able to pay his EMI, to the pilot not being able to pay his mortgage – at the retail level. The exporters with lots of orders for Europe – for the football teams, the pharma companies not being able to get the API from China, the leveraged equity broker/ his clients, the mutual fund distributor with a 30% fall in income – everybody is going to be impacted.

1. And finally what will it do?

Lots of business failures. Many small businesses do not have enough strength to stay shut for 45 days. Just impossible. So the longer this lasts, the hardest-hit households (and businesses) will have less and less ability to cope. A prolonged scenario when people don’t have jobs, and things are shut down, is worrisome in terms of what it does to the human mind. Students sitting and preparing for exams are likely to be stressed. The human psyche is not easy to understand.  We haven’t really had this experience before. The present Indian government may not have enoughd depth and sensitivity to handle this situation.

1. Is it so bad for India or the world?

Both. India was not exactly going at 9% to be able to take this shut down. We were merely crawling at say 3% and this shut down will be a beautiful carpet to push things under. Even in a good scenario, I don’t think we would have returned to business as usual anytime soon. Global trade patterns and global supply chains, with everyone relying so heavily on other countries. The flu of 1918 kept killing people till 1920. That was a HUGE 2 years. Now with so much of global travel, I think it is too early to celebrate the conquest of Corona. We have not even scratched the surface. Our life-styles are much worse than it was in 1920.  So I would not be expecting a pre-coronavirus environment like we had before. This is going to depress global growth for some time.

1. So Subra you have nothing positive to say about the Virus, impact on India and the World?

A. I am an optimist. However remember we do not have a successful answer to this virus. We are still not sure that this was not man managed (created?). We do not know whether China has the cure – and it was using it in Beijing. I like the response of the big governments – India, US, – clampdown, social distancing, etc. I am sure all this will have an impact on ALL OF US. Just be alive, that is a good goal to work towards.