Relatively Speaking

THE SAVING GRACE of coming out of a year that has been the worst humanity has seen in recent times is that anything that follows is going to be smelling of roses. That is re•ally nothing to celebrate. For example, take the Indian economy. It has been clobbered into a recession, but the stock markets are behaving as if there is a boom. It has touched historical heights right when the economy is at its nadir. And this it does anticipating that the pandemic will get over in 2021 and the wheels of growth will start rolling again. It is true. Growth will be stupendous as compared to 2020. It is only when you compare it to 2019 that the real damage is obvious. If you compare it to any pre-demonetisation years, then it is worse. The recession becomes evident in full measure.

This glass-half-full phenomenon will be in most sectors and fields. For example, healthcare indices might look good. Deaths will be lower and it might look like we have a functioning healthcare system because vaccines will be available to everyone. Its delivery will be good and chances are everyone would get it free. But that is only because the entire attention and focus of the Government will be on it. The rest of the system will totter as usual and perhaps, even worse, because not many who matter will be concerned about tuberculosis or Japanese encephalitis.

Likewise, the world of business. Coming after a year of zero or negative growth, companies will all be clocking double-digit upswings in toplines and bottomlines. But it is on the back of huge cuts in workforce and/or savings on rent since they gave up office space not needed during the lockdown. Most of those jobs won’t be coming back in 2021 precisely because companies need to show shareholders that they are making up for what was lost. They will still struggle to get the numbers back to pre-Covid levels because the economy is still in recession.

Entertainment, particularly mov•ies, will see an even bigger shift to over-the-top (OTT) platforms, but now it will not be forced on filmmakers. They will voluntarily choose releases on Netflix or Amazon Prime Video be•cause they have now discovered a safer business model. It might not make them hundreds of crores in profits but those who got that in the earlier model, were not more than what you could count on your fingertips. That is bad news for theatres. Most of 2021, people would still be wary of going there.

Business travel might resume somewhat but there would still be risk associated with it, and many companies would be reluctant to take on that responsibility. Hotels will see more guests and more people will be eating out, but a Covid-free experience will only come in a Covid-free world and that would be only after everyone is vaccinated. If you want to bet on a revival, the odds would be better for 2022.

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