My friend’s son ten years old, Raghav from Coimbatore impressed me with his video presentation on coronavirus explaining scientific facts.
I am enthused to assign myself a job of explaining him in simple, understandable terms, lockdown, its effect on social set up and few economics too.
I. What is Lockdown?
At the start of April 2020, little did I expect that subsequent months would be a testing period for adults rather than children? With movements restricted, increasing COVID positive cases, we are witnessing unprecedented emergency.
From India’s point of view, its huge population, general non-adherence to rules, lack of hygiene, etc., makes things difficult to face this epidemic without restrictive measures. This restriction is called lockdown. What is restricted need not be said. Now, India is looking at ways and means to exit from this lockdown.
1. Reason for exit:
Reason for exiting from lockdown is, not to reopen schools, colleges or offices or not to resume social lifestyle. It is the economy of the country which needs to be nursed and brought back into action.
2. Economics is a study of such economy as to how resources can be best distributed to meet the needs of people.
To understand, Agriculture is the mainstay of our country’s rural economy. To carry out the activity, Capital, other than Land, is required. Tilling of the land to make it worthy of cultivation is Labour (Men).
Sowing of seed, water, fertilizers and agriculture implements are input materials required for the activity. Rice, wheat, vegetables, etc., are produced as outputs. They are sold in the market in exchange for money.
Economics is about the production of goods and services with available resources. In this chain of activities, involves right from the manufacturer until an ultimate consumer.
3. Demand and Supply:
In our example, agricultural produce like Rice, pulses, vegetables, fruits and vegetable products have ready buyers who are called consumers. This need is called the demand for a product, and the products available for consumption is called Supply. Since these are market-driven, there is a transaction.
4. What is the market, and what is a transaction?
Producers, sellers and consumers act as channels and market is a place where the transaction happens.
The transaction is an agreement between the Buyer and the Seller. To effect this transaction, money is required. Money is a medium of exchange.
Purchasing a consumer durable or a food item is a continuous buy-sell transaction. There are chains of individuals who benefit from this transaction. In the process, the Government also earns by way of levying tax on goods.
Movement of goods thus has to be effectively managed. The management of the flow of goods from production to consumption, including its storage, is called supply chain management.
II. Moving to the next section, what is the Impact of lockdown on the country’s economy?
What a big deal it would be if no one buys and no one sells for a month or two during a lockdown? The market can always bounce back.
It is foolhardy to stop economic activity even during worst times, but in an epidemic situation where human lives are at stake, rightly so, lockdown lead to halt or disruption in productions and services.
When manufacture or service activity stops, it leads to loss of business. What follows is the loss of work, loss of income, uncertainty of resuming duties. It is a chain reaction, and the Impact of lockdown is a huge loss to a nation consisting of 135 crores of people.
Therefore, activities relating to farming, construction, essential and emergency services, Medical services and Banks were allowed to function.
III. Lockdown blues:
How has inactivity affected general economic welfare?
Thirty years back or more, when the communication channels and business were not opened up, it would have been easier to observe extended lockdowns. Today the business is happening across the globe & round the clock, and due to this hectic activity, the effect of lockdown on the economy is more pronounced.
IV. Going forward:
Countries like Sweden, Singapore, NZ and Australia have tackled this epidemic to some extent by observing self-restraint and precautions, but in India, this is a very challenging task.
Reopening of schools, office goers, chaotic traffic, Malls, theatres, and much more involving a lot of social contacts will make people more susceptible to virus attack.
We should remind ourselves that there is no expiry date for the virus. There is no magic wand with the Government to set right things in a jiffy. We, as citizens, should also put our shoulder to the wheel. How?
Diligent practise of personal hygiene, social distancing and in general caring about the community will be a new way of life.
Last two decades, economic growth resulted in money in the hands of the people due to improved employment level and improved purchasing power. This trend is slowed now, but the growing need to consume is ever there. Sometimes, mindless consumption also leads to wastage. Indigenous-Indian made- manufacturing should increase.
To reverse the present trend is to concentrate more on quality products and make India a better Land to do business so that we become self-reliant in real sense.
It is time to usher in a new India.
About the Author
The author of this blog is Mr Balakrishnan, who is a retired banker and a versatile writer. He has his unique and a gentle way of living his life which gets reflected in his thoughts and expressions. He can be reached at firstname.lastname@example.org.
Please find below the video of Master Raghav, which is the starting point of this blog.