KPMG, in a paper, lists seven ways in which the business landscape is likely to shift, not only in India, but all over the world due to the COVID-19 pandemic. Responding to these shifts will certainly help countries and companies navigate the path to the ‘Next Normal’, the study titled 'Potential impact of COVID-19 on the Indian economy' says.
COVID-19 will lead to a significant change not only in the immediate term, but also in strategies, the ways of working and mindsets of decision-makers and customers. KPMG believes that the government should immediately focus on three areas, job maintenance and creation, provision of a safety net for all Indians and resource mobilisation to support these goals.
The study adds, there will be a shift to localisation, and that digital will get a push even as cash remains the king. The businesses, the study says, will move towards variable cost models, and countries will build sensing and control tower capabilities.
According to the authors, supply chain resilience is key.
Many of these tenets will be applicable to policy development and implementation at the country and State levels as well, the study says.
Three scenarios
The study has pointed at three scenarios that can be used to explain the economic effects of COVID-19.
In the first case, it sees India’s growth for 2020-21 in the range of 5.3 to 5.7%, though this scenario looks distant at this moment. In the second scenario, the expected range is 4-4.5%. In the third, prolonged lockdowns will exacerbate economic troubles. Thus, India’s growth may fall below 3%.
As the world and the Indian economy attempt to balance mitigating the health risks of COVID-19 with the economic risks, immediate measures need to be taken to prevent collapse of liquidity and protect the vulnerable, while enabling social distancing, intensifying of health interventions on a war footing and unclogging production and supply chains, says the study.
Published - June 13, 2020 09:47 am IST
