Lockdown Opening: Who Wants ‘Flying Hospitals’, ‘Jails For Shops’?
This fractured, bureaucratic, impractical post-lockdown ‘opening’ needs to be junked. It’s making things worse.
‘Sampoorna (total, complete) lockdown!’ This 8 pm, 24 March 2020 announcement by Prime Minister Modi was a blow to the solar plexus of our economy. Within four hours, everything was to close – everything. Period.
Commercial entities like airlines, department stores, and liquor vends – which need daily revenues, customers, and cash flows to survive – went into a paralytic shock. But once the enormity of their crisis sank in, they began to do what a drowning person does, that is, clutch at any straw to survive. Slowly, a cruel, heartless, but perhaps also the only viable, plan took shape:
- Kill, reduce or defer each and any variable expense that you could. So airlines furloughed grounded pilots and crew. Stores laid-off sales boys and girls. Raw material payments were choked. Suppliers were told to come back after the lockdown ended.
- Quasi-fixed costs, like rents, electricity and maintenance charges were put in quarantine. After all, if the establishment was closed – I mean, once the lights are switched off, you don’t really need to pay the bijli ka (electricity) bill immediately, do you? So you could afford to hard-ball and re-negotiate payment terms and amounts.
- Finally, the government chipped in and freed these entities from ‘moral hazard’. So airlines got a moratorium on lease and interest payments. Stores could increase their cash credit limits riding on a sarkari (government) guarantee. And liquor shops got relief on license fee payments. Everybody got a holiday on their term loan liabilities.
Ever so slowly, the pain eased – or should I say, you were allowed to transfer the pain to others. To employees, vendors, landlords, utility companies, banks and the government. Sure, your revenues had crashed to zero, but your costs were re-sequenced, allowing airlines, department stores, liquor vends and other commercial entities to come out of coma – you were still in ICU, but not comatose.
That was the story which began on 25 March 2020 and ended on 17 May 2020.
It created a deadly paralysis, but life was yet to be snuffed out completely from you (and my illustrative ‘you’ here are the troika of airlines, department stores and liquor vends, but you can use your imagination to extend the analogy to any enterprise).
18 May 2020 – Economy is ‘Opened’ Up!
‘Yayyyy!’ – rang a collective national chorus – resonating from the clichéd Kashmir to Kanyakumari, Kaziranga to Kutch. The economy was cranking open, airlines would fly again, department stores would swarm with window-shoppers, and liquor vends would spray the good stuff. The dark nightmare was over, achche din (happy days) were here again, so rejoice, rejoice! Or so we thought.
But but but, department stores did not know whether to keep air-conditioning off or on. In 45 degrees’ heat. Other local authorities insisted they keep the store open on odd days, but closed on even (what?). Then they would allow only five shoppers in at a time – it did not matter that their floor area was 50,000 square feet, while their crummy neighbour’s was 5,000 – both had to follow the same rule (yes, only a crummy babu (clerk) in a crummy office could come up with such a crummy, silly ‘guideline’). Now, who would queue up for a mile outside their swanky store in the sweltering north Indian loo (dry, hot, gale speed winds), just to get in? Especially if they were not allowed to try a dozen tank tops before buying one (and leaving COVID stains on the other eleven)? While the malls were anyway closed, with massive unpaid bills piling up in their franchise stores there? It was an impossible situation.
Post-Lockdown Opening: Costs Are Back, Revenues Are Still Zero
The poor liquor stores had it even worse. Over and above all the crummy rules, their product was slapped with a punitive tax, often going up to 50 percent plus. And many had to jettison old stock under some archaic license regulation. So it made much more sense to quietly whisk away the maal (stock) to your friendly bootlegger – “psst psst, just give me 30 percent over the MRP (maximum retail price) in cash” – who could hawk it across the border at a hefty black market premium. What did you just say? How could the bootlegger move it across the border, since inter-district movement is banned? Oh c’mon, what’s a friendly little gift to the border guards – or perhaps even half a dozen friendly gifts? It’s all in a day’s work.
And all through this ‘reopening’ ordeal, the department and liquor stores can no longer stop rents or bijli ka (electricity) bills or suppliers’ payments, or term loan instalments.
All the ‘indulgent’ lockdown exemptions are gone, but revenues are still close to zero.
Perhaps the unimaginable is happening. Are they really – I mean, really – worse off now than what they were under the lockdown? Then variable costs and revenues, both, had crashed to near zero. Now costs are back, but revenues are still zero. Sh*t!
There is a poignant Urdu couplet (poet: unknown) which captures this trauma – Na khuda hi mila, Na visale sanam – that is, I got neither my God, nor my lover!
Why Airlines & Airports May Long for the ‘Comforting Shadow’ of Lockdown
You wear a hazmat overall, choke your face in a mask, walk through sanitising tunnels, get a dry biscuit on board, can’t get the plastic bottle through your face shield to your parched lips, spend two hours before and two after the tortured flight ploughing through safety drills – and finally, when you are about to do a high-five with your girl-friend who you have not seen for two months, you are rudely pulled away to a crummy quarantine dormitory for 14 days.
Pray, who will fly under these conditions? Only those who are desperate or in crisis, and their pent-up numbers will dwindle soon. Then flights’ occupancy could fall to 20 percent, if at all. Airlines will be awash in red, since fares are capped and all the variable costs will be back. Unbelievably, airlines may long for the comforting shadow of the lockdown, when revenues were zero and so were costs. Now, revenues will be fractionally above zero, but costs will sky-rocket.
So the airlines will sing the second line of the Urdu couplet – Na idhar ke hue, Na udhar ke hue – that is, we are neither here nor there!
Net net, this fractured, bureaucratic, impractical ‘post-lockdown opening’ needs to be junked. It’s making things worse.
The economy needs to go back to near-normal, pronto. Severe rules should be reserved only for containment zones. People need to be trained and persuaded to adopt personal safety measures; their instinct of self-preservation needs to be stoked. And the government’s entire energy needs to be spent on fighting the virus, not on policing the economy.
Finally, we have to live with and vanquish the virus without killing the economy – khuda, sanam, et al.
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