GDP Growth Statistics

GDP Growth Statistics: Among the many changes, Covid-19 has brought to our lives is attention to statistics on a daily basis.  A number of infected cases, tests, hospitalization, deaths, and recoveries.  People from all walks of life have shown interest in these statistical figures.

Every now and then, some international institution produces GDP growth statistics as well.  These get attention too, but not even remotely close to Covid-19.

On an analysis of the current trend, residents of prosperous states such as Delhi, Chandigarh, Maharashtra, Gujarat, and Telangana are expected to lose over 15 percent of their annual incomes in the current year, which is thrice as high as the average decline of per capita income of the country.

However, in relatively less well-off states such as Madhya Pradesh, Uttar Pradesh, Bihar, Odisha, etc., the decline in per capita income is expected to be less than 8 percent. It is to be noted that after a major economic crisis, per capita income takes longer to swing back to the old levels than the GDP.

The reason is simple.  People care about the risks to their daily lives when living under pandemic conditions. The fear of contracting the virus keeps many awake at night, even causing serious mental stress.

This is not because GDP growth is unimportant.  The ecosystem around the individuals and their families matters more than the changes in an accounting construct such as the GDP, particularly so when public health is facing risks of the kind not experienced in over a century.

The economic destruction Covid-19 is causing does not take the form of ashes.  It takes the form of jobs and income losses for millions from different segments and industries. It is reflected by the empty saloons, shops, footpath trades, tea stalls, restaurants, public transport, and sports stadiums, among others.  It is manifested in closed factories and unsold farm outputs.

Supply and demand are both down abruptly, causing unexpectedly far-reaching repercussions. The cost of living and the cost of doing business have both spiked.  The interconnectedness between the speed of lifting the mobility restrictions and the rate of community spread of the virus, as evident from the experience of countries attempting to reopen in phases, has deepened radical uncertainties related to the outlook on global economic recovery.

A consensus is emerging globally that the recession will be deeper and the recovery will be slower. The stumbling reopening of the entire world has made it clear that the speed of recovery will depend on the spread of the virus.

Medium-term macroeconomic and fiscal frameworks are never written in stone.  Revisions have to begin with the recognition that the quest for GDP growth in a pandemic is like searching for a needle, in a haystack in darkness, that isn’t there.  Business as usual in public expenditure planning cannot connect the economy with the health and social outcomes that will determine the quality of our belligerent coexistence with the virus.

There are a lot of things outside the counting of GDP we just do not have a handle on currently.  Whether economies can continue to grow forever was an unresolved debate before Covid-19. The virus has paused this debate by shifting attention to the challenge of making the economy thrive whether or not it grows.  

This challenge can be unbundled into fortifying resistance to the virus and ensuring that no one falls short of the essentials of life.  These formidable challenges can only be managed through collective action that starts long before they become full-blown crises.

We do not need GDP numbers to know the effect of the lockdown: the majority of our states, and practically all of our trading partners, stopped us from eating at restaurants (and then maybe going to the gym to work it off), having elective surgery for a bum knee, sending our kids to school, or having our teeth cleaned.

Effectively, the lockdown became a ban on living everyday life. Moreover, for scores of millions of Indians today no work means no income. If handled right, policies to contain the spread of the virus will actually deliver huge economic benefits. Many in the rest of the world, with some exceptions, are starting to get this.

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Future of Cash: Covid-19 Impact on Payments

The intersection of global emergency and revolutionary changes in the ways of international payments and transactions has demanded a new path to maintain financial liquidity in the markets. Since the inception of the pandemic in December, businesses across the country have been facing volatile financial markets and growing concerns about the uncertainty of future cash flows and revenues.

The entire world of small and middle-sized companies is in a constant struggle for survival due to the frozen demands and the contingent government-declared lockdowns. 

COVID -19 has resulted in a reduction in cash being used as a medium of exchange. The reason attributed is the inability to have a physical reach to execute such payments during the lockdown. The potential threat of money bills being a carrier of the virus made it further a discouraging choice.

These have forced individuals to switch to digital payments as urgency to acquire the essential goods. The cash processing agencies, such as banks, are operating in reduced hours or for important transactions only. Cashless payments could become a permanent fixture in the economic exchange ecosystem hereafter.

However, a robust digital payment system has yet not been achieved in the country owing to several structural challenges that hindered the boost in cashless transactions. Technological advancement, current emergency, and a need for cashless transactions have eradicated such boulders to a certain extent.

Electronic payments faced a number of barriers and obstacles in bricks and mortar shops, along with challenges like cybercrime, fraud, and privacy concerns seem. The widespread move to contactless, cashless payment systems raises concerns about the impact on low-income consumers, often mobile members, and members of minority groups who do not have access to credit or debit cards. 

For now, the move away from cash remains clear and can not be ruled out completely. While a society that is not fully cashed may not be the outlook for the time being, the following factors are likely to affect market participants because the Covid-19 pandemic will likely have long-term effects on consumer behavior.

The concerted effort from various stakeholders potentially facilitates the reduction of cash transactions in the system. The important considerations in this regard are-

• A complex Digital Payment Setup

A variety of options available with different technological frameworks and regulations make it difficult to operate for an average citizen. Further, the lack of uniform technological advancement has kept consumers from adopting digital payment methods wholeheartedly.

With the rising rural population getting connected to high-speed internet and smartphones, digital startups have focused on developing secured consumer-friendly methods in order to build trust and drive adoption. Aadhar-based welfare delivery and a relentless drive towards formalization of transactions have been the cornerstones of the current government’s policies.

The introduction of the Unified Payment Interface (UPI) and the Bharat Interface for Money (BHIM) app is accelerating the move towards a cashless economy. This has given an impetus to the emerging digital transactions sector in India. Further, the government has come to the aid of distressed citizens by announcing easier means of transaction, going cashless. The requirement of a minimum balance requirement fee remains no more along with reduced digital charges for transactions.

• The Intermediary interference and charges

The costs associated with online payment through RTGS and NEFT systems have also created a hindrance. These methods are not only expensive but also time-consuming at a time when there are a number of technologies available that offer real-time fund transfer.

Startups are now focusing on technologies providing quicker digital payment solutions to the consumers who will have a better opportunity to get ahead, POS terminals, Biometric Authentication Integration, and QR Codes are used by onboard merchants. One of the main challenges in digital payments is the interchange fee.

The Finance Ministry has announced relaxations such as removal of debit card ATM charges to help increase the number of transactions. 

• Maintenance of Data Security

Data storage is one of the most critical and essential aspects of cashless payment methods. The high risks associated with cybersecurity have kept consumers threatened by adopting digital payment. Digital payments Banks and E-Wallet companies have set up safe, secure, and compliant data centers on their premises.

For enhanced security measures, banks and wallets are now using Aadhar Based payment systems making use of Biometrics, OTP (One Time Password), and EMV (Chip+Pin) technology for card acceptance. Collaboratively these have always helped in maintaining data security for companies as well as customers.

• Adherence to Regulatory Compliances

For digital payments especially through wallets, there are guidelines issued by RBI in India. These guidelines get revised on a timely basis which makes way for a more transparent ecosystem in the payments space. Companies offering wallets are required to convert existing wallets that are without KYC to full KYC. KYC complaints can utilize the extended monthly limit. In the future, these limits need further relaxation to support the needs of the individuals. 

• Response time 

There is another important challenge that these payment methods face response time to execute a transaction. The complex authentication method and attached chances of payment failure and fraud have disheartened the users in many instances. Irrespective of the reasons behind it, every failed transaction causes irritation to a customer.

Repeated failures may even result in customers feeling frustrated about the bank’s service quality and capabilities. These responses are identified immediately for corrective measures to be undertaken. The modern UPI system making the authentication in-built into the smartphone has removed the time taken to execute a transaction.

• Cryptocurrency – The new era of digital transaction 

A cryptocurrency is a digital “asset” that uses peer-to-peer networking making it decentralized and broadly accessible. The asset is a digital “token” with no backing or intrinsic value. The method used is new blockchain technology. Blockchain data is stored in groups or blocks of information.

It is impossible to delete or modify information previously stored on the chain because blocks are replicated across multiple ledgers. For the above reasons, blockchain is highly secure. Every user has a unique public and private key. The public key acts like a username or an email address. It allows users to transfer a cryptocurrency to and from other users directly.

The private key is akin to a personal password that gives individual users access to their cryptocurrency accounts or digital wallets.

Their end of this medical crisis is beyond anticipation, the primary implication of the same would lead citizens to be habituated to the use of digital payment platforms, almost by force. The technological setup of smartphone penetration improving significantly, with almost 5.1 billion total unique mobile users and 3.7 billion unique mobile internet users, will surely help smooth the adoption of digital platforms for payments.

The opportunities that e-commerce and cashless transactions afford in terms of convenience, efficiency, and affordability will help them gain further ground in the years to come; their popularity among younger generations and strong government policy support for digital transformation is also helping boost their prospects. It need not be said that as a direct consequence of Covid-19 we could witness a cashless ecosystem in the near future.

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Zeroed Down To Mobile Applications

The ban on Chinese apps comes as a big blow to China’s market. As the first salvo against China, post the bloody clash at Galway valley on June 15, India has a lot to cherish. In the guise of protecting the sovereignty and integrity of India, the target has been to cause massive damage to the Chinese economy.

Relying on inputs from intelligence agencies that have seen visible traits of compromising on users’ privacy, the action is a welcome move. There has been a soaring demand of banning Chinese applications since the heightened tensions at the border and aligning the move with the aspirations of millions of Indians provide the much-required political boost.

Speculations have been underway to retaliate against China zeroing down on its technological applications. Undeniably, the popular Chinese apps had been hurting the sentiments of domestic producers who breathe with sighs post the announcement. Losing Indian consumers on apps like Tiktok and Likee would leave a deep dent in Chinese revenue.

The government aims at mandatory data storage within the country and the ban will facilitate mulling such an idea. Stealing and transmitting unduly unauthorized user data to servers located outside India hereafter can be prevented to a great extent.

The notification is expected to be followed by instructions from ISPs to disable these applications. Users are likely to see a quick message that access to the applications has been restricted at the request of the government. However, while this will affect apps like TikTok and UC News that require live streaming for any purpose, users can still continue to use scripts that don’t require an active internet connection to use.

But more downloads of these apps, like CamScanner, are likely to close on the Google Play Store and Apple App Store.

In what is assumed to be a befitting response to the misadventures of Beijing, substantive measures ahead are awaited. The government’s extremely resolved dexterity to hit China on multiple fronts has been well proven. While the standoff remains on the ground, the digital counterstrike has perhaps begun.

The way China does not permit operations of businesses from outside their territory, India has absolved such tactics to pressurize through varied mediums. Notably, the ban of these many apps is sure to hinder China’s digital expeditions gnawing up on its ambitions of the Digital Silk route in near future. India in its current move has strategically aimed at hitting China’s extravagant growth and prosperity on the technological front.

Nevertheless, such an action is not here to ensure that Chinese troops will backpedal from the Galway valley that has been occupied. There are big pocket brands like PayTM, OYO, Swiggy, Zomato, and BigBasket amongst others who work on heavy investments from China.

The anticipation of a counter-attack from China shall not be futile given the present circumstances. While pummelling on the low-hanging fruit might not yield much of a practical solution, nonetheless, the emotions of millions of Indians have been marshaled hereof. India has learned lessons from the previous ventures of Beijing and has rightly thronged at it this time.

China brought the entire world to its knees with the spur of an unknown virus at the end of 2019. Previously hit by India’s revised FDI policy and now the embargo on Chinese apps shall not conceivably go in vain.

While hurting the Chinese sentiments shall be directly consequent to the move, keeping in mind the immense popularity of many such applications, Indian users shall be left behind looking for coherent alternatives. Many such platforms having Indian creators, which is the only source of income could put thousands of jobs at stake.

While one has to wait to understand the accurate implication of the ban as well as speculate reprisal from the opponents, the sweeping effort will definitely be a warning for bigger Chinese enterprises, besides raising alarm in Beijing. Till then Indians can revere the small victory and hold up for the next to come.

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COVID-19 Hardship: Investment During Pandemic

The entire world is encountering vulnerability and difficulty due to the phenomenal COVID-19 pandemic. This pandemic came when the worldwide economy was confronting intense occasions. Henceforth, in the given circumstance, it is imperative to take judicious budgetary activities, both preventive and remedial, to guarantee the general monetary wellbeing of an individual and his/her family.

At regular intervals, traded on open market organizations report both their real budgetary income and their normal possibilities over the not-so-distant future. Financial specialists intently watch these reports for indications of guarantee or inconvenience, in a custom similar to perusing tea leaves.

In any case, with the COVID-19 emergency overturning marketable strategies left and right, deciphering those leaves is more testing than any other time in recent memory. There is an unprecedented degree of uncertainty associated with the encounters.

For investors, the test is twofold: foreseeing when that bounce back will come, and picking which stocks will win and which will lose when it does. Missing corporate direction is more enthusiastically than expected and it’s typically hard.

Be that as it may, a clearer picture is beginning to develop. Since the stock market investment crested three months back, tech mammoths like Amazon and Netflix have fared well, as have drugmakers like Gilead. Vitality organizations like Halliburton have been hit hard, alongside banks like Wells Fargo.

Retailers’ parent organizations have endured as customers remain at home, yet those taking into account homebodies, similar to Domino’s, are flourishing.

The aftermath of the pandemic has made new open doors that natural development pioneers are best ready to catch. By putting more in their pool of advancement ability, giving these individuals the scope to take advantage of these lucky breaks, and empowering reasonable dangers, these development heads will expand their lead further.

The extreme development movement lighted by the worldwide pandemic shows that a few elephants can move when they should. Organizations are moving quicker and facing greater challenges than could have been envisioned a couple of months back.

A further catalyst to re-evaluating built-up and lumbering advancement approaches is the quickening of numerous patterns that are as of now in progress. The lock-down has presented a move to online work practices and group sharing stages while making new chances. For instance, 3D printing is getting a lift by assisting with supplanting faraway providers with close-by 3D printing contractual workers and making flexible chains stronger.

To exploit this move, HP quickened their “3D as an assistance” plan of action development, where clients pay just for what they print. The computerized change of enterprises did not stop for the emergency.

An approaching inquiry is the means to abstain from returning to the awkward and mindful inheritance practices and hazard-unwilling dynamic that had stumbled development execution in numerous associations. As vulnerability subsides, there is a squeezing requirement for direction on which changes to advance ways to deal with organizing, and how to choose which chances to get a handle on.

The COVID-19 pandemic can be anticipated to have a drawn-out effect on the deals of more up-to-date CPG marks as it is driving shopper preliminaries. Purchasers are regularly purchasing items they ordinarily do not accept as they plan for isolation. This is transforming into a national demo program that our brands are getting paid for.

Our expectation is that we increase a lot of new clients who may find us at the markets during this time, bring our items home, have a positive encounter, and later consolidate them into their day-by-day or week-by-week schedules when things balance out.

The forecast is that anything that has to do with wellbeing, health, invulnerability, and supplementation will have delayed development throughout the following quite a long while. This occasion has solidified in our psyches how conceivably helpless we are as an animal group and it will engage numerous individuals to endeavor to assume responsibility for their wellbeing.

Possible approach toward investment

As the fear of the global economy moving towards a recession grows, it is likely that there will be a liquidity crunch coupled with high inflationary pressures. In this situation, setting up short-term financial goals becomes important. Any investment decision during this period should be made by factoring in the short-term goals of an individual. The investments should be adequately liquid to address contingencies and short-term needs.

Here, the effect contributing network has an exceptional chance and a pivotal task to carry out. The moral of the story is, that socially useful ventures can be raised as an advantage class of decision, and effect financial specialists can lead the route in expanding the quest for pioneers, leveling the topography of information, and along these lines encouraging a progressively successful reaction to the current emergency.

Since their essential spotlight is on expanding hazard balanced returns, conventional speculators are probably not going to convey account in the territories that need it most at the present time. Be that as it may, sway venture can, by marshaling the assets expected to carry progressively different trendsetters into the well-being and wellbeing of adjoining segments.

All the more comprehensively, the pandemic ought to rouse those outside the effect contributing network to re-evaluate how money-related capital is activated and conveyed. It is to everybody’s greatest advantage to energize progress toward widespread access to excellent medicinal services comprehensively, on the grounds that, at last, wellbeing underpins each part of society, including the economy.

Past tending to the prompt wellbeing crisis, Covid-19 likewise necessitates that we center around long-haul arrangements. There must not be another arrival to the same old thing.

We have to begin building vigorous, comprehensive frameworks that represent all the social determinants of transmittable and incessant ailments, which will keep on plaguing the least fortunate and most underestimated networks the world over.

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