New Challenges for Employees During Covid

 New Challenges for Employees During Covid

-Dr. Lalit Kumar

Expenses Up and Incomes Down:

The Covid-19 is making the life of middle class citizens critical. Those who are doing business are facing slowdown in business and those who are serving companies are facing cut in the salaries or retrenchment in the company making them to leave the job. In all countries, developed and developing nations, the unemployment is emerging as a prime economic problem of the nations. The expenses over medical services, emergency expenses; reduced the savings and investments of the citizens and their incomes also reduced significantly.

Non-availability of Loans or Credit at cheaper rates:

The slowdown in economy leads to cash crunch even in the financial institutions and there is non-availability of loans or credit at cheaper rates. In other words, the rate of interest on loans or credit have increased significantly. The employers or companies are not offering loans to the employees as there is scarcity of cash in the companies. The financial institutions are taking advantage of such scarcity and giving loans at higher rates of interest.

Online or Virtual Job Opportunities increased the competition among Employees:

The remote working patterns in the companies and businesses increased the competition and now there are more number of individuals available to work from remote areas. There is challenge to sustain the existing jobs as the companies are recruiting talented people who can work from remote areas as well. Due to such availability of the people, the existing pay packages are not increasing and the companies are cutting the salaries. As there is lack of employment, the employees are not going against the companies due to fear of losing the job.

Need of Budgeting and Financial Planning

Everyone requires to do proper planning to manage the monetary resources. There are problems in increasing the revenues, therefore, it is required to cut the expenses by taking advantages of discount in purchasing goods, postponing the purchase of fixed assets and unusable expenses. It is required to keep sufficient amount of cash in hand, to take the advantages of offers whenever available in the market due to cash crunch. Further, to stay fit and reduce the expenses over medical facilities, it is must to adopt Yoga and Meditation in life.

New Economic Problems

New Economic Problems

-Dr. Lalit Kumar

Economic Situation of India after Covid-19:

It is worth to mention that India allocated Rs. 2 Trillion during the last 5 years for increasing the production in various sections like Autos, Textiles, Food Processing, Solar Energy Equipment, Telecom etc. The Foreign Direct Investment (FDI) is being attracted to finance the needs of the sectors, however, efforts are being made for “Atam Nirbhar Bharat” as well. Today, India is leading whole world in Software, Autos, and Pharma Sectors. The incentives on productions and imposition of custom duties are making the environment friendly to the domestic production units. In last few years, the Indian Economy has been affected adversely from the bankrupt companies and the unemployment also has been increased.

India is not performing well due to lack of Research and Development and also not implementing the best practices or innovative ideas based upon already done research. It is required to inculcate the culture of Research and Development (R&D). There are lack of incentives for doing R&D to the Academicians and Scholars, Scientists, and Professionals. The agitation of farmers to Contract Farming, has changed the scenario as well and the industrialists are feeling stressed from it. The land prices are increasing due to new land acquisition law and labour cost is also increasing due to impact of Covid-19. The use of Apps for remote education and training, also changed the whole scenario. 

New Economic Problems:

Both the developed and developing nations are suffering from some new economic problems which are required to be identified by the Governments. The unemployment and corruption are old economic problems which are still getting attention of the Government and the Good Governance initiatives and Entrepreneurship Programmes are particularly to target these two big problems of the countries. The world bank is also funding the initiatives of the nations to make them empower to fight with such economic issues. There are a few new economic problems affecting the countries which are required to be focused to improve the financial performance and economic status of the economies:

1.   Improper planning in making policies:

Most of the policies are made by sitting far from the people affected with the problems and the policies are impractical due to ignorance of ground realities. Many countries are dreaming to demonetize the currencies which the people have not been provided access to the technological means in the countries. India is a latest example where demonetization not showed the desired outcome. The economists found that the decision of demonetization was taken in hurry and there was lack of planning while formulating the policies relating to demonetization in India.

2.   Unequal utilization and excess exploitation of economic resources:

The non-performing assets in banking sectors of the nations including United States of America (USA) are increasing due to unequal utilization of the economic resources. The development of metro cities, smart cities, and use of information technology are not equally distributed around the world and this has also contributed in rise in unemployment, the traditionally well-known economic problem of the countries.

3.   Terrorism with support of unemployed youth:

The terrorists have become successful in targeting the intellectual people to work with them. The unemployed youth not getting access to economic resources to meet their requirements to stand with other equally qualified persons, preferring to use their qualifications in harming others after getting financial support from the terrorists. The attacks in United States, India, Pakistan, and other nations clearly show the use of technology and it is possible only after the success of terrorists in getting support from the well-qualified unemployed youth.

4.   Depreciating currencies:

The countries’ currencies are not depreciating not in terms of comparative assessment but in terms of amount of resources i.e. purchasing power. The financial resources are being costlier. The concept of keeping gold as reserves for issue of currency and the concept of keeping foreign currencies to represent the same gold reserves; are now no more being followed. Due to unnecessary interference in increasing the demand of currencies, the economies are suffering from the depreciating value of their currencies.

5. Inefficient Management of Growing Waste:

I attended a session on “Waste Management” today and realized that everyone of us, is a waste generator. We know it and as a part of society it is our duty to reduce the waste. For one person which is not a waste, for other person, it may be waste. The resource person rightly gave an example that a person taking pics of a lake, may think that the pics are not waste but for others, it can be waste. Therefore, every one of us is a waste generator. Dr. Sanjeev Chaddha concluded that the best way to reduce and eliminate waste is to send it back to the place from where it is generated. For example, Wet waste comes from soil and fields, it can be used as compost for the same fields to increase the agricultural produce of the soil. The plastic waste comes from the polymers which comes from the petroleum industry, therefore best way to dispose it is to convert it into petrol or use it for power generation. The e-waste is very harmful which is generated from gadgets of information technology, the waste should be recycle and reused for the same industry.

With the growth in population, the cities are growing and also contributing to increase in the waste. The per capita waste is 100 grams in a city after growth, it becomes 500 grams per capita. The huge waste becomes difficult to be managed by the Government as there are limited places to recycle and reuse the solid waste. In future, the situation can be more critical as people are not much sensitive to reduce the waste and be less waste generators. 

*Copyright © 2020 Dr. Lalit Kumar. All rights reserved. 

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Government Interventions Work Temporarily

Government Interventions Work Temporarily

The Government intervenes to ensure economic development at higher rate but the interventions work temporarily. What to do for permanent solution to economic problems?

Each government intervenes through various measures of fiscal and monetary policy to ensure the economic development of their economy. The interventions improve the situation as per the desire of the government but not bring a permanent change. What can bring the permanent change and how policymakers of India can perform in today’s scenario?

The Control over Social Media Platforms in India:

The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 were formed and released by the Ministry of Electronics and Information Technology (MeitY) in February, 2021. 
The Government gave three months time to compliance these rules to the Social Media intermediaries. There are seven major Social Media intermediaries in India i.e. Google, Facebook, WhatsApp, Telegram, Koo, Sharechat, and LinkedIn. As per new norms, a resident of India would be Grievance Redressal Officer for timely resolutions of the grivances of the users of social media platforms. Further, a Chief Compliance Officer will also be appointed for ensuring compliance of IT Act and Rules and there will be a monthly compliance report be prepared with the details of complaints received and action taken. 
No doubt, the rules are challenged on basis of freedom of speech and expression in India, but keeping in view the national security many experts favoured to implement the Act and Rules. The fake news are affecting the life of common men and users of social media. There are many instances when abusive language is used on the social media and automatic system of complaints not worked properly to block or take action upon the persons responsible for it. The mob violence is also due to misuse of social media platforms. Now after receiving complaints, the technological companies have to remove the reported content within 24 hours. Even first originator of information will also be identified by the companies. However, the tracibility of such originators is really difficult and tedious task required to be done by the social media intermediaries that is why a few are hesitating to implement such rules. 
This intervention of Government will work to control the misuse of the social media platforms but at the same time will affect the free speech, which is a basic tenet of Indian Democracy.

Why it is bad to safeguard economy through interventions?

The intervention of central banks of countries to safeguard their currencies can work in appreciating or depreciating the value of the currencies but such changes are temporary. The issue of securities by the United States of America for appreciating the value of Dollar and in order to pay higher rate of returns upon issued securities, the USA has to perform for higher rate of return which will cost the economy and its citizens. Ultimately, the current account deficit (CAD) of the country will rise due to this particular step and to correct the situation, the USA’s Dollar will automatically depreciate. What can be the best strategy to improve the value of currency? How without any intervention, the currency can be appreciated or depreciated? The monetary and fiscal policies of the countries make temporary changes in the value of the currencies, then what can be done for bringing the permanent change? How China is competing with the world without making such interventions, is a lesson for the other countries.

In India, during 2018-19 and 2019-20, it is felt that the economic growth became stagnant and prices also started rising. Such condition of economy is known as "Stagflation". In such case, how Government intervene?

There was 7.35% rise in the consumer price during December 2019 due to rising prices of Onions, Potatoes etc; the temporary intervention to buy onions and selling through depots worked to control the inflation but it harm the 'free market conditions' and the business men suffered from losses due to lower sale of their procured onions. The Reserve Bank of India (RBI) became under pressure to cut the rates for improving the liquidity in the economy but due to Stagflation and fears of inflation, was not able to cut the rates in February 2020. 

The Government has started to consider the supply side solutions to this problem of Stagflation and definitely there are chances to tackle this problem by encouraging manufacturers and service providers to increase their productivity and quantum of the services delivered.

Where to focus for improving the value of currency?

Let’s focus upon the fall in the value of rupee, why it is depreciated after the independence of the India? More the expenditure upon developmental or non-developmental functions of government, directly or indirectly depreciated the value of rupee. The productive work of entrepreneurs leading to more collection of taxes, increase in employment, reduction of poverty etc; also appreciated the value of rupee. Developed nations are more progressive because the citizens of nations are more comfortable to generate the employment opportunities and are working to perform better with their strategies without being worry to pay the taxes. While in developing nations, the rates of taxes are too high that the business men instead of putting their efforts to earn more, put more efforts to evade taxes with the help of Chartered Accountants (CAs). 

In September 2019, the GDP dropped to 6.3% which was lowest during the decade of 2010 to 2020. Thereafter, the Indian Economy witness the losses from Covid-19 impact and now in December 2020, the Kisan Movement further making the situation worst. 

In such circumstances, India is struggling to prepare for the war with the Pakistan and China to fight with terrorism. Obviously, the currency will further dropped and this time, India requires the support of economists to sit inside the NITI Aayog and frame a chart to boost the economic growth.
Continued.... <<Restricting Demand of Products and Services to contain Inflation is good or bad?>>

*Copyright © 2018 Dr. Lalit Kumar. All rights reserved. 
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