There should be a change in mindset, where local authorities are expected not only to check the spread of pandemic but also proactively work to restart industry and businesses and be accountable for it. They should be asked to speedily restart businesses to help create jobs.
By Dhanendra Kumar
One of the most relevant quotes on the commencement of the nation-wide lockdown in March was “we are closed for renovation, grand reopening soon”. In his stirring address to the nation on May 12, his fifth in 54 days, PM Modi exhorted the country to convert this unprecedented calamity into an opportunity to do something extraordinary. He recalled that the 21st century belongs to India, and we have to face the crisis with renewed confidence and rebuild India into a ‘self-reliant’ nation with the unwavering resolve of its 130-crore people. He gave a call for ‘local,’ and for being ‘vocal’ about it and making it ‘global’. He outlined his strategy for building ‘this magnificent building of self-reliant India that stands on five pillars’.
First, the economy, which brings a quantum rather than incremental jump.
Second, infrastructure, which became the identity of modern India.
Third, our system, based on technology-driven and modern systems.
Fourth, our vibrant demography.
Fifth, our demand, the cycle of demand and supply chain, harnessed to its full potential.
He announced a total economic package of a staggering Rs 20 lakh crore, an unprecedented 10% of our national GDP. He also announced that while ‘corona will become part of our lives for a long time’ and that we must ‘wear masks and maintain a two yards distance’, the ‘fourth phase of the lockdown will be completely redesigned with new rules.’
Indeed, we have to learn to live with corona for quite some time, and redesign our lifestyle accordingly, where social distancing is going to be the new norm. As announced by the PM in his clarion call, we have to work with a renewed confidence for rebuilding a new, self-reliant India, occupying its rightful place in the global comity of nations.
This article attempts to deal with the fifth pillar in the PM’s address in some detail. If we look at the experiences of countries around us, e-commerce has played a big role in harnessing the cycle of demand and supply to its full potential.
China is a classic case, which grew as the powerhouse of manufacturing for the world. This was the period when China witnessed an explosion in its manufacturing, and e-commerce facilitated it in becoming a supplier of the world demand. The story of the unprecedented rapid growth of Alibaba, JD.com, Taobao, the development of the entire supporting infrastructure of warehouses in the supply chain, connecting supply and demand with the use of modern tools of technology, is a well-known story. Even after Covid-19, according to Jack Ma, “E-commerce will be the key for enterprises to survive, for countries to prosper, and for the world economy to get boosted”.
In keeping with the PM’s objectives of ‘local’ becoming ‘global’ envisaged in the “Make in India” scheme, which aims at producing goods of global quality and standards locally, e-commerce is the best vehicle with social distancing as the key norm. More so, it is essential for a country of India’s size and diversity to tap its fullest efficiencies in production wherever possible, and to build a distribution and logistics infrastructure for meeting demand.
There is no reason why there cannot be synergies between e-commerce companies and traditional kirana stores. In fact, the two can work together for maximum efficiencies in distribution. Kirana stores could be digitised, and there could be real-time flow of information of demand and inventory in an integrated manner, with last-mile delivery linkages being coordinated, and efficiencies and savings achieved for both. The infrastructure of logistics, storage, and use of modern technologies and demand forecasts could be instituted for mutual benefit.
The artificial distinction between ‘essential’ and ‘non-essential’ goods must go, as during the extended lockdown as now, especially in containment zones, people do suffer a lot of difficulties and inconvenience—notably the aged, and those suffering from co-morbidities—there are a lot of items that become essential. Unavailability of such items in the market, then, becomes a cause of concern. To differentiate on the basis of colour-zoning of districts is also not quite tenable as the entire supply chain is integrated.
For instance, warehouses are known to be located in districts categorised as red—as is the case for Flipkart—which means that supply chains could stand disrupted. Once demand is better known and anticipated, it becomes easier to create channels for smoother and uninterrupted supply, too. Now that even the Supreme Court has suggested home delivery of liquor to avoid congregation—and many states are opting for this—there might be a good case to review the classification of several items as ‘non-essential’.
The competition authorities have also taken this into account. CCI has come out with an advisory in April stating that it “has acknowledged that Covid-19 has caused disruptions in supply chains and that information sharing and coordination may be required by businesses to ensure continued supply and fair distribution of products and services. Under Section 3(3) of the Act, coordination amongst competitors is presumed to cause Appreciable Adverse Effect on Competition (AAEC). However, at the time of competition assessment, CCI has to take into due regard, amongst other factors, pro-competitive effects such as the accrual of benefits to consumers; improvement in production or distribution of goods or provision of services; and promotion of technical, scientific and economic development by means of production or distribution of goods”.
The power of e-commerce has to be recognised and factored in other areas too. For instance, in services, there is tremendous need and potential for supply of services of electricians, plumbers, mechanics, repairmen, barbers, beauticians, etc, in all three zones. This will enable deployment of lakhs of these self-employed professionals, providing their services through reputed e-commerce platforms like Urban Company—it is estimated there are approximately 40-50 lakh women, mostly single mothers and sole bread-earners, looking for jobs as beauticians. Simultaneously, it would make life easier for people at this stage of extended lockdown.
Of course, all these professionals have to be deployed in a one-to-one format to avoid congregation and ensure adherence to social distancing norms, with strict mandatory protocol checks for temperature, masks, the Aarogya Setu app, gloves, sanitisers, single-use sachets/disposables, and contactless service experience.
There are several other areas where the power of e-commerce needs to be exploited. In fact, in many areas across the country, this is already being done, such as in healthcare, where the services of doctors and medical practitioners can be delivered to people in their homes, education and coaching, where online classes can be conducted, legal proceedings in courts, where judges could sit in their chambers and lawyers can conduct their pleadings on video or online in real-time, etc. The applications are numerous, and the possibilities immense. The regulators and authorities would also encourage these to the extent they are convenient, boost efficiency, ensure maintenance of physical distancing norms, and can help contain the contagion.
The PM has also announced a redesigned Lockdown-4. There are a lot of expectations that in the next phase, when a certain measure of weariness has crept in and there is a need to open up business, the regulations and guidelines will be designed to ensure maximum convenience for the public as well as businesses, commensurate with the competing need to contain the spread of the pandemic. In the interest and spirit of ease of doing business and attracting new businesses, all unnecessary regulations must go.
There should be a greater atmosphere of trust and harmony. It was noticed during Lockdown-3 that a few districts that had been classified as orange by the MHA later, of their own accord, categorised themselves as red, and imposed unnecessary and harsher anti-business regulations. There should be a change in mindset, where local authorities are expected not only to check the spread of pandemic but also proactively work to restart industry and businesses, and be accountable for it. They should be asked to speedily restart businesses to help create jobs and ensure that normalcy returns soon.
This is indeed our chance, and we must collectively work toward a final grand reopening!
The author is former chairman, CCI, & ED, World Bank. Views are personal