“The current lockdown is unsustainable. In our lives we cannot eliminate risks, it has to be managed or mitigated. What is clear is that what we are doing to murder the virus is also murdering the economy. Now, it is time to think of a nuanced response,” says Manish Sabharwal, co-founder and chairperson of TeamLease Services, who is also a member of the RBI board and the CAG board.
He spoke to The Quint’s editorial director Sanjay Pugalia about the need for a more calibrated response to the COVID-19 pandemic.
In this interview, Sabharwal has given some surprising insights. For example, Sabharwal said that those who are thinking that work from home will continue even after the lockdown are wrong.
What Should the Govt Do to Save The Economy?
Sabharwal's advice is that wherever there are green zones, that is areas which are not hotspots, businesses should be allowed to start. According to Sabharwal, “It was sensible not to bring a relief package at one go, but a relief package is needed and has to be announced in many stages. The government and the corporate have to understand that the poor man needs help first.”
If the lockdown continues after 3 May, Sabharwal's advice is that the government should first provide relief to the poor, then to the middle class, then to the small business and then to the big corporates and then finally, fix the financial market.
The government must do one thing that gives companies the ease of doing business –provide loans to small traders on their guarantee.
“Banks cannot help much. There is a crisis of survival in front of companies, not capital. The non-performing assets (NPAs) of the banks themselves are going to increase by millions of crores. Companies can only give jobs if the customer pays them money. If there is no customer, there will be no jobs, nor will they be able to provide jobs.”Manish Sabharwal, Chairperson, TeamLease
‘Salary Spike Maybe Seen’
“If the lockdown ends on 3 May, then salaries will increase as the labour and employees have gone home,” Sabharwal said.
He added that while the employees return, and they will take a month or so to return, the employers will have to hire again at higher salary rates as there will be a paucity of people.
The notion that labourers will not return to cities is not right, he said, “Even labourers, the people who have returned to villages, will come back and work. In India, we have to take the person to the job and not the other way round.”
‘Work From Home Will Not Be the Norm’
Speaking about the way the economy will develop, Sabharwal says that contrary to opinions, work from home will not become the norm.
“Work from home has exposed a class system. Those who work with their brains can work from home, but this is not an option for those who work with their hands, which are a majority of the people,” he said.
Speaking about productivity during work from home, Sabharwal said, “The excitement for work from home is not based on productivity, but based on continuity. While digital systems have expanded in certain sectors, in majority of them that has not happened. Work from home is not a long-term solution.”
‘India Has an Opportunity to Grow’
Sabharwal believes that COVID-19 has brought a crisis for our economy but also an opportunity to expand manufacturing.
According to Sabharwal, “There is an old saying about India – India does not change when there is a better option, but changes when there is no other option. Our GDP projection growth rate has gone from 2 to 4 percent to a 2 to 4 percent contraction rate.”
He goes on to say that this will create pressure. “A lot of pressure will be built on politicians, policymakers, governments and companies to initiate reforms. The bane hence is the policy window, that will be an opportunity India is capable to take advantage of.”
“Many companies have been disillusioned with China and will be open to go to other countries for manufacturing. Due to this, like the opportunity China got in 1978, the same opportunity now lies with India. India can benefit from this and take advantage of the situation, but the condition is that policy changes will have to be made immediately. Otherwise, countries like Bangladesh and Vietnam will rob the opportunity,” he adds.
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