SWOT ANALYSIS -- COVID 19 LOCKDOWN

[ANIL ANIKHINDI]

Across the globe in over 175 countries, everybody is worried about current situation and trying to protect/defend oneself with the help of available resources. Let us analyse this “lockdown” into SWOT:

STRENGTHS

Lowest impact in India as compared to other countries like America, Italy, Spain etc

Fortunately India is yet to cross 2^nd stage

Prompt/early corrective actions taken by Central/State Governments

On-going peak summer season

Successful overcoming experience of 2008 crisis unlike other developed countries

At least 11 months financials are ready in hand which may not much affect the financial year

Equity Investors in India are only 2% against global 40% and MF penetrators are 12% against global 60%- Much scope for attracting small investors into equity/MF markets

Hand-in-Hand co-operation between Central and all State governments

WEAKNESSES

Thick populated cities, urban suburbs

Unawareness of general public not easily willing to accept changes in lifestyle

Reluctant to adopt new things like Work from Home (except IT sector)

Health system network is very poor in India

Large scale Un-organised labour sector

Industrial imbalanced growth resulting into migration

Unintended moves of neighbouring countries

Financial illiteracy amongst major business class

Traditional way of handling business transactions in “cash”

Carrying huge unaccounted money

Habitual nature of finding out legal loop-holes,

Reluctant for legal compliance across business sector

OPPORTUNITIES

“Once in a life” opportunity to adopt new things in day-to day operations

Boost to E-commerce, on-line transactions, Work from Home in all segments

Adoption of new technological innovations

Relaxations announced by Govt. in Income Tax/ GST procedures

Financial Package declared

Decisions of RBI in relation to CRR, REPO, Reverse REPO etc

Moratorium announced by lenders

Availability of stressed assets at very low prices th’r Insolvency & bankruptcy Code -IBC (presently average resolution rate is around 30-40% of outstanding bank loans with waiver of all other creditors)

Initiate registration of all unorganised/migrated labourers so that structured policies can be framed by Govt./employers (India has 70% unorganised class)

MSME companies relieved from risk of IBC due to increase in threshold limit of default from 1 lakh to 1 crore

Finding Import Substitutes (especially from China)

Start thinking Cost reduction actively and scientifically

MF participation can be doubled

To unlearn old things and learn new things

Boost to Local employment

Business Health Diagnosis, Business Process Re-engineering will be inevitable

New way of thinking 2020 BC (Before Corona), 2020 AC (after Corona)

Big jump in Diagnostic sector

E-learning model in education sector, virtual classroom, e-books will flourish

“Social Security” will be on the top of Govt. Agenda

Indigenisation, “make in India” movement will spurt

India may have to shift from “Services” sector to “Manufacturing” sector

Govt. spending will increase manifold, MSME sector benefits

Rich class may be taxed high

Individuals may develop good new hobbies, habits in the changing lifestyle environment

THREATS

Non abiding lockdown instructions

Attacks on health workers, Doctors, Policemen

Unintended organisation of social/religious events

On-going global recession, Financial crisis, Economic slowdown

Chinese companies interested to take over certain Indian companies under IBC or other mode

Pessimistic thinking

Large number of NPA cases in banks (existing and new), increase in stressed assets

Migrated labourers may not willingly return to job without some extra monetary benefits

Employers may be required to pay for lockdown period without any productive returns

Great burden on working capital

Banks may put extra restrictions in case of credit risk

“Force Majeure” may be misused

Health/Police personnel may think of Revolt

Unemployment on large scale (30% already reported from US)

Demand and supply both will drop significantly, going away from established economics theory

GDP may drastically come down by 2%

Business model of “running behind profit” will prove wrong

Social life may come to halt at least for next few months

“Life” vs “Livelihood” will become unintended choice

Socio-economic inequality may increase

Addict people may turn into violence

“Globalisation” may be proved wrong to some extent

 Entire supply chain will be affected

Suggestion:-

Have patience, remain optimistic, wait and watch, maintain social distancing, create sustainability till medication/vaccination found on Corona.

Take care of your health, family health, business health.

By CMA, IP (Dr.) ANIL ANIKHINDI