[PearlJam]

Covid or not, this is an eternal dilemma. How much of your assets are good enough to shield you from uncertainties in your retirement years? Too much conservative, and you might die old and rich, with no outlets to enjoy the wealth created. It would be a life wasted. On the other hand, too rash with your spending, and you might be on the street well before old age hits you.

While there are a countless number of spreadsheets that help you fine tune this balance, the uncertainties can never be captured.

I think Covid has just made it worse this year, and exposed the eternal faultlines in the saving habits of the lower and middle class, that's all. In the larger scheme of things though, even pre-Covid, so many businesses have died out. Like in 2008, when the Nifty crashed from it's all time high.

It's not the first time that the middle/lower class is in this situation today. Those who did not (or probably could not) save for a rainy day, have always been, and will be in future, at the mercy of the, erm, rains. This time, it's been Covid, but there has always been a different reason every such time in the past.

[Gansan]

In my immediate and extended circle I have not seen anyone losing their job. Most work in I.T. or service sector. Most worked from home. May be some lost a pay raise, probably. Those who worked in manufacturing for big employers too didn't suffer. I have not seen any businesses or shops close down either.

I myself am a retiree, my income is in the form of pensions, interest and rent, so no impact. In fact my tenant also is a pensioner so I received the rent on time each month. My wife works for a small industry which manufactures cosmetics for MNCs. She suffered a 40% pay cut for three months. She also lost last year's raise. Their order books didn't dry up and continued normally though. They just needed an excuse to not give a raise to employees. Just plain cussedness.

The ones I have seen suffer most are the people working as maidservants and such. A couple works as watchman and housekeeping staff in our apartment complex. The wife works as domestic help in a few apartments in the complex and outside. He cleans cars and bikes for some additional income. The moment lockdown was announced, all households including mine stopped maids. We were paying the salary for six months as a sort of retainer, but had to stop it. She got back the job in a couple of houses only in January, but they have suspended her services again from April.

I have seen Electrician/Plumber, carpenters too suffer as everyone tried their best to avoid letting in strangers inside the house. Only for the past four months or so life became near normal for them. I would also add the pujaris of many temples who depended on offerings from devotees, and purohits who visit homes to conduct various ceremonies, to the list. They literally starved for six months. For them also life came to normal only a few months ago, and now the second wave has struck. Teachers in many private schools also suffered, they got half pay or in some cases no pay.

[Sebring]

I have not heard of job losses (in my circle) in Bangalore. Real estate prices have doubled after lockdown was lifted, and few schools are demanding 50% more fees from parents for the coming year. Situation is confusing, to say the least.

[Raghu M]

It's a very tough situation to be in. What could have been a decreasing trend in cases has suddenly turned to be a devastating second wave. Pandemic fatigue has set in and man being a social animal cannot live without moving around and meeting people. It is only the age old saying that is at work here - survival of the fittest. No one imagined something of this sort would happen. When I see in the news that office space is being consumed in Hyd, I really am shocked. Who is buying this space and for what and how? There are tech companies that have done extremely well during the pandemic and will continue to do. My company is hiring at a crazy pace and we are short of right talent while on the other hand, there are people losing jobs.

The industries that are the hardest hit are the hospitality, travel, manufacturing and jobs that can't be done from home. I don't think any government would be able to handle anything of this proportion. No economy is growing (of course barring China). Unless we haven't saved for the rainy day, no blame game will ever work. At the end of the day, it is we who need to feed our family and take care of their well being. Like GTO pointed out, it is always prudent to spend wisely when we have the bucks coming. There is an old saying in Telugu, "when there is light, you need to set things in order".

I am a lucky Covid survivor, I can understand the pain of people who have been hit because of this. The economy is shrinking because people like us have stopped spending like we used to do earlier. When was the last time anyone bought formal clothing? Shoes? Perfume or deo? Eating out reduced drastically, travel, hotels, leisure, meeting at pubs. All this plays a huge role in the economy sliding. Just because we are working from home, there are a host of sectors that have literally been wiped out. Cabs, small restaurants near plush offices, tea stalls, PGs, house keeping staff, security staff, real estate near SEZs, even fuel stations in and around office spaces, metro and the list goes on. I don't think any government can take care of all these sectors, let's accept the fact.

There was an interesting point made by an MP from Karnataka. He wanted the government to stop work from home as it was directly impacting a huge section of people. There is a valid point he made (although quite shocking), but how many of us are ready to get back to office?

[asit.kulkarni93]

Covid-19 may have started the downfall but I feel the following reasons are the real reasons-

1. Lockdowns- Last year they were tough but most of us were able to sail through. In the past 9 months, Government had sufficient time to improve medical infrastructure but that didn't happen and this year we have another set of lockdowns. These are horrible.

2. Expectations- Be it an engineer or an MBA, They need to understand that our education system lacks in giving practical knowledge so everyone can not get a job. My father in 1988 started from a low paying job because my grandfather wasn't ready to let him wait for the right opportunity and sit at home. He insisted my father gain some experience. That's not the case with most freshers today, they have the financial freedom to sit home and not gain the right experience which can help them grow.

3. Lifestyle- The YOLO generation that I belong to, commonly called as the millennials are smitten by materialistic things. People want expensive phones, cars, parties and other gadgets. Obviously posting about such things on social media is mandatory. This materialistic lifestyle is hazardous unless you are super rich. Even the actual rich folks, Don't waste their time on such things. One of my ex-employee's had a phone worth 25k, bike worth 120k and Bluetooth headsets + watch worth 7.5k. All these things were picked up on "easy available finance". He was warned about his attitude at office which had suddenly changed and the final nail in the coffin was when he came drunk to office and argued & fought with a fellow employee. He was fired immediately and his ego came crashing by the end of the month when it was time to pay his EMIs. All the other employees had started SIPs on my insistence but this smart guy was adding EMIs. This perfect lifestyle on social media is hazardous.

[2000rpm]

Originally Posted by GTO

And we still haven't bottomed out IMO. The worst is yet to come, we will see that in the economy as well.

I think the nation is only slowly realizing what it is currently facing. Unless you have run door to door for hospital beds and remdesivir or plasma, you dont realize how bad the situation is.

I think this has ballooned beyond control now. 2021 looks to be worse than 2020.

[Emvi]

While the fallout of the pandemic or the pandemic induced lockdown is no doubt huge, I have a slightly different take on this issue. I don't think middle class is the most affected or only middle class is affected. Certain sections of the society, certain businesses and certain jobs have been badly affected, but generalising is probably a difficult proposition. The most impacted have been the hotels, restaurants and few new ventures started just prior to lockdown. Leaving aside media publications for a moment, if we look around, it is open for everyone to see and gauge. Speaking from what I can see and understand, fortunately, none of my friends/relatives and friends of friends have been affected much. In fact a couple of people who I know, who run small to medium scale business have actually thrived during this period more than they have ever before! But fact of the matter is these guys don't acknowledge this publically and if interviewed by a journalist, they have nothing but horror stories to say. Couple of my friends have not had salary increments and delays in the salaries being credited to their accounts. Even this is not because the companies don't have money to pay, just that few companies are milking the situation to their advantage. Yes, I am not claiming that people have not lost jobs. People have lost jobs and have suffered financial difficulties immensely. At the same time, I have also seen people making shrewd investments(land, stock market and others) in the period. Agricultural sector wasn't affected much as it has been made out in the media especially in my region. The daily wage labourers and the people below poverty line(genuinely or not) had the facility of free ration and were never rendered jobless. I remember reading somewhere that the automobile industry is one of the biggest indicators of a country's economy. With the volume of vehicle sales that we are witnessing now, especially in the sub 20 lakh rupees segment, I leave it to you to decipher the situation.

[AZT]

Originally Posted by warrioraks

The biggest red flag for me is the fact that stock markets are now considered as proxy of economic wellbeing of a nation. India started playing this game as well which led to overlooking the pain of less affluent sections of the society, eventually making them suffer in silence.
...
'Things in excess lose their value', Covid just re-taught us - Human life is cheap in this country and alas, no-one is insulated!

I've had this same thought, stock market is nothing but FII's / FPI's and hedge funds pumping cheap foreign capital. It neither cares about health of the economy or rise / fall of purchasing power of general populace.

Regarding economic uncertainty, Rule one of preserving wealth is eliminating events that can wipe you out and for the common man, that one time event is a medical emergency. Everyone should look at their present insurance and decide if its sufficient. Lower amount insurances may have 1% room rent capping and some other criteria, best to port to another company if you can avoid that. You should probably have an idea by now of what is a sufficient insurance.
For employer provided insurance, understand what is the Copay requirement, are there any network hospitals where you can go cashless and other T&C.

Another point I'd add is having an emergency corpus, ideally equal to your six months income or more. This and adequate insurance should tide you off till things get better.

I myself work for an MNC but I've always felt the growth engine of any economy is the small & medium businesses. Small retailers who don't own their premises risk getting wiped out this pandemic. All bombastic rhetoric aside, we risk just becoming an outsourcing hub for the US/Europe if small companies just can't scale up and legit create domestic demand.

I remember reading about brain drain back when I was in school and I've never seen so many looking to emigrate abroad / get a PR as I have in the past 3 years.

[anandhsub]

The US calls it the Birth and Death model. But broadly in every economy, as it undergoes both cyclical and structural changes some companies and occupations will die and others will be born and the overall economy will grow at a trend rate. There are very few which have withstood very long term changes.

However what's missing in India vs the more developed economies is the social benefits that make sure just because you have lost ur job or your company has shutdown you don't return to poverty. This is in the form of unemployment benefits reskilling or even dirt cheap loans to start afresh.

The reason why these don't exist is due to the millions who are still in poverty and making sure the middle class unemployed doesn't lose his standard of living is very low on the priority scale for all the decision makers. It would be very difficult to justify paying someone who has lost his 40k/ month job 20k/month when there are so many poor who live on much less than that.

Hopefully sometime in the not so distant future these automatic stabilizers become a reality

[m8002?]

The only thing we can hope and pray is that the govt. doesnt put in another lockdown. Its really sad when the rulers dont give two hoots about the condition of the economically backward people. What matters is just winning elections, building new monuments and keeping the the core voter base happy by promoting events like the Kumbh which was totally uncalled for in the current circumstances.

The lockdown impact is now being felt by people up in the hierarchy. However, I remember last year many people, in this very thread, defending the lockdowns and justifying the way migrant workers were treated. We just blindly put in a lockdown aping the west but conveniently forgot that the govts there also offered support system to companies and individuals. But people here were happy as long as they could work from home and their bubble wasnt breached.

I am sure if some minister is questioned based on the report in the opening post, it will be dismissed as foreign conspiracy...

End of rant!

[xcentrk]

The first lockdown put our business under huge debt. And we recovered from it just a few months ago. And I couldn't image another full lockdown. That would put an end to our business. We suffered a lot and worked 24x7 to be at where we are at, right now.

We completely spent through all our backup funds, emergency funds and infused a lot recently in a hope that the economy pulls through. While I am maintaining covid rules strictly, I get mad to see other's don't. All I can do for now is, stop stocking products and keep the cash with us, as I don't see any other option if lockdown is imminent!

[Thermodynamics]

Job losses, Inflation, Healthcare inadequacy, Life losses, the Situation is grim. If my phone rings in odd hours I skip a beat fearing which near and dear is lost now.

It is ironical that when a common man is reeling in poverty, India adds 38 billionaires in 2021 to Forbes world’s billionaires list (link). The privileged ones whose names start with “A” retain the top two spots.

[v1p3r]

Let's be realistic and take a step back.

We had much less sympathy when thousands, if not millions, of migrant workers had walk back to their native states. These are people without the cushion of education, some semblance of formal savings, a support system. Some died along the way. There was the odd post about how it is awful and will probably hit us soon, but no separate thread or outpouring of concern (unless I'm mistaken). In fact, there were some worthies who said things like 'government is right' and 'you should obey the authorities', because of course they were vaccinated against empathy or humanity. Thank god they are not on this thread.

Now this situation affects us, in our upper-middle class, English-speaking, internet-surfing, WFH privilege. It was obvious to anyone who wasn't either blind or mentally underdeveloped that the economy was still precariously balanced. It was more obvious that people were more concerned about collecting money for elections than any real healthcare infra improvements - which, by the way, was the original purpose of the lockdown. But as usual, we carried on, banging our pans and clapping our hands.

Now we are staring down the barrel of a cannon. All our education and money and privilege isn't going to get us a hospital bed or that fabled last vial of Remdesivir, because they don't exist. We are at war with biology, and biology doesn't lose.

If my post offends anyone, I'm not sorry. Over the last week, I've witnessed death and heartbreak like I didn't think possible.

Originally Posted by xcentrk

The first lockdown put our business under huge debt. And we recovered from it just a few months ago....
...
All I can do for now is, stop stocking products and keep the cash with us, as I don't see any other option if lockdown is imminent!

I am sorry for your situation. You seem like a decent person. I hope your business pulls through.

Originally Posted by m8002?

The only thing we can hope and pray is that the govt. doesnt put in another lockdown.

Prepare for one, starting in May.

[extreme_torque]

Originally Posted by v1p3r

Let's be realistic and take a step back.

We had much less sympathy when thousands, if not millions, of migrant workers had walk back to their native states......

Could not have put it better myself. I call ourselves, perpetual eternal victims - we let it all go belly up and then start acting like victims when we had everything to do with it. We vote like victims, we think like victims without realising that we are a victim of our own mistakes, of trivialising politics, of our own subjugation, of not doing enough when we should have but its never our mistake. Infact we are not even a republic anymore. Sad sad times to be in.

[VKumar]

Originally Posted by v1p3r

In fact, there were some worthies who said things like 'government is right' and 'you should obey the authorities', because of course they were vaccinated against empathy or humanity.

That was a hard hitting post mate! But, very well put together.

Removing Inequality Vs. Removing Poverty

Inequality: Income, education, social status, quality of life gap between the classes of society. Applies at a macro level to districts, then states, and then even nations.

Poverty: Not a relative term, in layman terms, it is simply a situation where one finds it hard to meet the ends. In my opinion, anyone who is even driving a Fortuner but is unable to pay EMIs properly, is a 'self-driven-to-fake-poverty' guy.

We saw this mass migration, mainly due to inequality. Why is it so that only a few states managed to come up as industrial hubs, while others couldn't? That's where I blame the Governing bodies. They have been focusing on poverty alleviation, but never noticed the widening gap. I don't say that Govt. needs to turn into a Robinhood, but making a few people rich with excess money in economy going only to a few selected pockets; you are going to cause a bigger damage to the nation than actually alleviating it from poverty.

Some say that tax revenue of states is the reason behind this inequality and lack of industry in a few. Indeed the reason. Had the Governing bodies worked on infrastructure at the right time, instead of just making their vote banks happy - things would have been different, last year we saw the 'vote bank' getting crushed under the wheels of locomotives, while trying to walk back home along with railway lines. Today I feel bad when I see the people who passed out their engineering degrees with me, 6 years back, are still awaiting their SSC results for the exam that happened 2 years back, to be declared - this is not the way, and this isn't acceptable either; we didn't vote for this day at least.

Everyone is glorified till everything is going good, only the machinery breaks down - then only the real engineers are appreciated. Current day is the moment.

The ones who feel that nobody has lost a job in their surroundings. I also belong to your category, I even quit mine amid this grim situation. Never forget, it is Economy, and it is a circle. When consumption expenditure goes down, government revenues go down with it, hence taxes go up - inflation goes up, when inflation goes up, then value of everyone's money gets eroded, when the value of money gets eroded, cost of production and services goes up, when this cost goes up - companies start cutting costs. So, nobody is immune; hence I say, it's better if things get back on track asap, because the domino effect in economy is something that nobody would want to witness.