COVID-19 triggers once-in-a-century crisis: Kumar Mangalam Birla

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Coronavirus pandemic has already been a proven enemy for all business and activities happening around. Kumar Mangalam Birla stated in a letter to his shareholders about the huge contraction going to happen in the Indian economy during 2021. It is already a predicted fact that 80 per cent of India’s GDP is generated from districts which are classified as red and orange zones during the lockdown where economic activity remains severely affected. Thus, the correspondent effect will be on India’s GDP which will contract and such a downfall will be the first instance in over four decades.

COVID-19 have created a fog around everywhere so that it is getting quite difficult to predict what future has kept for us. The major opinion of Hindalco Industries Chairman Kumar Mangalam Birla was about the trigger COVID have generated which can be termed as once-in-a-century crisis amid the lockdowns and is highly affecting the society, economy and GDP. He cited that the hit of the pandemic was in such a distressful time where already India was facing global uncertainty and pressure in the domestic financial system.

A strict national wide lockdown was announced to slow the pace of the spread of virus starting from March 2020 and was active in various degrees in different geographical locations throughout the two quarters of FY 2020-2021. There is an exemption to some companies who have done exceptionally well even during this crisis time and those companies have quality leadership, a track record of winning in stormy times and sound business fundamentals who are going to emerge as the champions of new normal global order. We are very sure about the recession but still, it is going to be quite different from the recessions which we had in the past. The uncertainty is sudden and almost like falling from the cliff, where we don’t have any control and affected each sector and every economy. It leaves a huge impact in job markets, economic activities and will create havoc among all. We can assume and be optimistic that there won’t be any second wave for the virus pandemic and maybe the recession will be one of the shortest. If the lockdowns are lifted soon, then the business will reopen, economic activities will bounce back quickly and the world will become normal. A total of USD 9 trillion is accumulated from different governments to support the recovery. Some scars will remain the same even after coronavirus is eliminated. There will be a delay in recovery for sectors like aviation and hospitality along with some supply chain disruptions.

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