VOLUME 19 ISSUE 1
THE STRATEGY WALL How To Establish The Missing Link Between E-Commerce And Small Sellers In India Supply Chain - From Disruption to Opportunity
THE STRATEGY AND CONSULTING CLUB OF IIM ROHTAK
“The reason most people never reach their goals is that they don’t define them, or ever seriously consider them as believable or achievable. Winners can tell you where they are going, what they plan to do along the way, and who will be sharing the adventure with them” — Denis Watley
Contents 01
How To Establish The Missing Link Between ECommerce And Small Sellers In India
03
Supply Chain - From Disruption to Opportunity
06
The Hybrid model or The Hub and Spoke Model?
09
International Outlook on Indian Cut Roses and Strategies to Increase Turnover
14
A Shift In The Content Consumption Patterns
16
Budget of a Reviving Economy: Presuppositions about the 2021 Union Budget
HOW TO ESTABLISH THE MISSING LINK BETWEEN ECOMMERCE AND SMALL SELLERS IN INDIA ATTISO BHOWMICK, UAS BANGALORE With all the casualties and pandemonium that COVID 19
the benefits of e-commerce, making small retailers more
came along with, it also did quite an earnest job at
cautious about investing to upgrade their businesses to e-
accelerating the digitization of businesses around the globe.
commerce.
Businesses faced an unprecedent crisis when the pandemic
What are the Potential Solutions and Strategies?
hit the world with its new rules of complete lockdown,
Proper execution of any new technology requires the
cessation of all commercial activities, social distancing,
fortitude of effective strategies and planning. When it
periodic and expensive large-scale disinfection of workplaces
comes to encouraging online business for small sellers in
and other challenges. With the sustenance of business in
India, the situation becomes a little complex. Online retail
view,
of
giants like Flipkart and Amazon in India have time and
participation in the e-commerce revolution has become
again faced severe criticism from The Confederation of All
painfully evident.
India Traders (CAIT). The principal reason behind such a
especially
for
small
sellers,
the
importance
passive aggression is distrust and lack of proper technical Why are Small Sellers reluctant to join e-commerce?
know-hows to scale up an online business. Already
Prior to analyzing and developing strategies on how to equip
established online retailers can partner with government
small retailers for e-commerce revolution, the possible
cooperatives and trade unions to help sellers spread
constraints preventing it must be addressed. When it comes
familiarity. Regular workshops and awareness campaigns
to any new technology, its adoption by the smaller retailers
can be conducted to spread awareness about the ease of
depend heavily upon previous engagement with it and
doing business online.
general familiarity with digital services. The traditional way of setting up a website by purchasing a domain, loading it with keywords to make it search engine friendly and wait for it to gain organic web traffic is not an easy task. Hiring a professional for it is also not feasible as India is a price sensitive market. Geopolitical heterogeneity and lack of awareness about the efficiencies of customer outreach made possible by ecommerce are dominant constraints. A general sense of disinterest and indifference coupled with the obstinacy to stick to traditional methods results in incorrect assessment of
PAGE 1
Ease of receiving payments form an integral part of all e-
The ease of access and usage is perhaps the biggest
commerce platforms. Following Amazon’s example,
stumbling block when it comes to diffusion of e
setting up an integrated UPI interface can go a long way.
commerce in Indian small-scale businesses. Although,
Online payment merchants must work in close proximity
India has the biggest internet subscriber base (Source:
with the retailers on the platforms to resolve any issues in
BBC News) and has one of the cheapest mobile data
collection of payments. Smooth keeping of records and
prices, it still lags behind in the penetration of e-
transaction details is a better alternative for a seamless
commerce into the traditional business models which
conduction of online business. Furthermore, it eliminates
are already prevalent. The origin of this lies in the
manual tasks like data entries, maintenance of invoices
complexity in the usage of new technologies. To make e-
and enables easier customer-related disputes. A study by
commerce a success a platform which primarily focuses
Ahrefs, a Digital Marketing company, showed that a
on ease of handling must be designed. It can serve as a
major part of the revenue from e-commerce business
great selling point when properly marketed. Most of the
comes from the high re-purchase rates of existing
technical details must be automated and predesigned
customers.
turnkey solutions must be employed to achieve the
Maintenance
of
personalised
customer
profiles and past purchase records boosts the sales of
desired effect.
previously purchased goods, thus increasing customer
Conclusion
loyalty, which is often persuaded by small retailers. Online
The vast proliferation of affordable smartphones, cheap
payments serve as an excellent index to assess the
mobile internet and the huge number of youth
expansion of e-commerce. The graph alongside (Graph 1)
population in India makes it an ideal scenario for e-
offers an excellent view as to how e-commerce has sky-
commerce. When the entire country becomes a gigantic
rocketed for the last 2 years. Another unique example can
marketplace, the integration of small sellers can directly
be made of Udaan, which is a B2B online platform to
change the economic landscape leading to more
connect small and medium size manufacturers and
competitive pricing of products and a demand-driven
producers with online retailers and aids them payments,
business, in contrast to the supply-driven businesses that
logistics and technological support.
is more dominant for offline small retailers. Because of
A proper use of incentives can play a major role at this
numerous unique attributes of the Indian localised
stage. Reward of small monetary perks and special
sellers, like highly decentralised business models, high
privileges for the for a limited number of sellers who
liquidity of the payments, dependence on locally
register at an e-commerce platform can boost their
available
engagement. The same strategies can be applied to
incorporation
encourage the registered sellers to refer their fellow
special attention from governments and industry leaders.
traders about the e-commerce services. The vast success
The transition can only be achieved with a smooth and
of PhonePe as an UPI application was successful because
gradual transition by alignment of all favourable factors,
they introduced a monetary incentive for referring
and less likely with a disruptive innovation.
goods, to
and
limited
mainstream
customer
base,
e-commerce
its
requires
PhonePe to the user’s friends and relatives.
PAGE 2
SUPPLY CHAIN - FROM DISRUPTION TO OPPORTUNITY IRASHI JHA, SYMBIOSIS INSTITUTE OF INTERNATIONAL BUSINESS, PUNE “One of the only ways to get out of a tight box is to invent your way out.” – Jeff Bezos The demand and supply graph of almost all the
US-China trade war, and then the pandemic, Covid 19
countries of the globe has seen a tremendous shift in its
acted like the salt in the burn. Also, since many
behaviour after the virus occupied the space. Covid 19
countries of the world are directly dependent on China
came like a pausal revolution into our lives and proved
for essential commodities like the raw materials of
that there has to be some way out of the lazy processes
pharmaceuticals and others. Big fluctuations in the
that
Digitization,
demand-supply and thus the supply chain of China has
Digitalization, Sustainability, Security, Visibility are few of
become a problem not only for them, but also has hit
those visions that we have to command on in the very
the larger portions of the globe. Also, the bad
near future.
reputation of China has inclined the countries to shift
As we are aware that China has been deeply hit by the
their procurement from China to some other countries.
we
have
adopted
since
ages.
PAGE 3
But as one rightly says, in the difficulties lies the real
the records digitally (Digitization), supporting an
opportunities. These disruptions have opened the doors
application that could support the entries of both the
for India to take the global position in the near future.
point of production and the point of purchase needs
India needs to look on how to increase the efficiency,
to be developed. To cater to these needs, sourcing
visibility and the responsiveness of its supply chain. A
rightly, processing quickly, and packaging correctly
good news for India that came a very few months back
has gained paramount importance. There is a high
is that Japan has mooted the Supply Chain Resilience
need
Initiative (SCRI) as a Trilateral approach to Trade, with
ecosystem, and this strategy has already been
India and Australia as the other two partners. Japan
adopted by many giants.
proposed this initiative so as to mitigate its supply risk
When talking about agriculture and the allied sectors
and reduce its dependency on China. Japan imported
that managed to see a growth of 3.4% even when all
goods worth $169 Billion from China, which accounts for
other sectors got hampered, there is a ray of hope and
24% of its total imports in the FY19. But due to the
great opportunity that lies in this field. Looking at the
pandemic, this import came down by 47.1%. This huge
health conscious India, small and marginal farmers
decrease in imports and the SCRI initiative in itself
could easily be benefitted by growing vegetables.
becomes a great opportunity for India to bridge the gap
Vegetables could be easily used in the evening
between the supply and demand of Japan. Also, India
snacks of veggie tacos and others. A great example is
does not hold much trade with Australia till today, but
Subway in that matter which uses healthy dietary
can witness a positive relation with it in the near future.
products for its snacks, and we can witness its
Also, being the part of another Informal grouping, i.e.
appreciable growth in a very short period of time
Quadrilateral Security Dialogue or the Quad which
within India as well as the world. Hence, the
include the US as the fourth member, and other three
procurement strategy needs to be changed. The other
being the same (India, Japan and Australia) would be a
benefits for sowing vegetable crops is it has high
boon for India to rise and expand its virtue in the
economic value, the prices of seeds are low, can be
ASEAN nations.
harvested thrice to four times within an year, and
But then again raises the basic question, from where to
hence can be easily adopted by the Indian farmers
start? The answer is Digital Transformation. Maintaining
whose average land holding is only 1-2 hectares.
for
building
a
holistic
digitised
retail
PAGE 4
Now, let us consider the recent trend of sustainability widely accepted by the European countries that stands at 87% acceptance, then comes the global giants that have accepted it to 47%, and at last stands the Asian countries that follow sustainability to just a mere 28%.
European
nations
have
introduced
Carbon Border Adjustment Mechanism so as to decrease their part of depletion caused to the earth. Another big step involves penalising the corporates that are involved in GreenHouse Gas emission in any way. Europe is constantly trying to fulfil its promise made to Paris Climate Communities to decrease its emission to 45% by 2030 which earlier stood at 55%. And do we realise what could be the consequences if we do not shift ourselves (India and other Asian nations) towards sustainability? Asia exports 15% of its total to the European countries, which stands at $146 Billion. Now, if we do not follow their norms, they could anytime ban our products entering into their states,
thereby
decreasing
our
net
exports
considerably. The big players, although look at sustainability and economy side by side, like CocaCola, Pepsi Co, Red Bull, Unilever and others have worked jointly with Refrigerants Naturally so as to develop sustainable refrigeration technologies and combat climate change and ozone depletion. Sustainable supply chain actually means the Venn diagram
of
People,
Planet
and
Prosperity
(Economic). Also could be termed as the idea of Natural, Human, Industrial and Technological systems working in connection to create a better world. Sustainable supply chain adopted by Unilever is also one of its kinds that took the strategic vision of long term positive effects. It broke down its supply chain in operational and tactical goals which are connected at individual levels. So, we realize that there are many macroeconomic and microeconomic factors present that affect our supply chain strategy to a very high extent. The aim is to build a system that can bring high economic growth within limited resources.
PAGE 5
THE HYBRID MODEL OR THE HUB AND SPOKE MODEL? PRIYANKA SAHOO, XAVIER SCHOOL OF HUMAN RESOURCE MANAGEMENT (XAHR), BHUBANESWAR We all know people used to ask themselves “Why do
office workers were committed to develop their
I go to office every day? Why can't I simply sit at my
workplace at home providing themselves an extra
home and do my work in front of my desktop or
ordinary authentic remote work environment. Some
laptops?” all such WHYs used to hit the minds of
employees discovered that work from home raised
every individual with 9 to 5 job. But this pandemic
their productivity and improvised their work life
did act as a dream come true for many. The
balance. Most, however, work somewhere in the
lockdown and stay-at-home orders across the world
middle. They could see the benefits of remote work
has given almost all employees a chance to
stations and on the same side needed office work
experience work from home for an extended period.
environment. Companies, meanwhile, develop the digital infrastructure for remote work and were able
With work from home culture being adopted by
to see how a distributed workforce good operate.
every organisation we saw that home office furniture
And here comes the very well acknowledged trend
and appliance sales shot up across the borders as
“The Hybrid Workforce” model.
PAGE 6
The hybrid model did help us get over the limitations
of
a
complete
remote
working
environment and allows team to interact, meet in person and collaborate together in widely better way but it has its own challenges. Employees sitting at home in front of their laptops, trying to adopt to new normal are desperately craving for the good old human interaction with their colleagues in that official globe. Survey of white collar workers done around the world, published by Barco, revealed surprising findings about employee expectations for the workplace post Covid. The study shows that only 15% of employees want to continue to WFH full time after covid-19. This clearly shows that WFH lost its sparkle
since
nearly
half
of
those
surveyed
employees said that, WFH now is stating challenges in collaboration with colleagues, struggling to collaborate in meetings and major missing of social office life. Moreover 42% globally stated that working from home suppresses their creativity. 37% miss office social life and 45% find it easier to work with colleagues in office.
Now
with
WFH
being
the
new
normal
and
technology advancing with a hike, home workers do not miss the commute but they do miss the face to face collaboration and interaction. One way to take advantage of the cost benefits of WFH, while still providing opportunities for in person collaboration, is a “Hub and Spoke” model for the office space. Here a company provide small satellite offices closer to residential
areas
that
employees
can
use
on
occasions. Businesses can operate their Central headquarter or “the hub”, that employees travel to less frequently and at the same time increase the number of “Spokes”- smaller, satellite office spread across a city closer to which a group of employees live. This will minimise the commuting time and bring employees together to work in teams. This model is gaining the attention. As per a survey, more than one third of business leaders around UK and Ireland are considering to phase out their primary offices to similar small satellite workplace closer to their employees living station. Listing down the advantages of a hub and spoke model, here are some of the merits. This would help in breaking inter-team silos. It will help in building a community based on common experiences of where the live in. This will also promote cross-functional work culture. It gives a touch of more natural, authentic, and
Source: Peoplemattersblog.com
This pandemic has shown that many organisations can work entirely on a remote basis but it has also revealed the drawbacks of WFH facility. The desire for face-to-face collaboration, but without risking the life of the commuter, has prompted some employers to consider a new workforce model for their promises. One model that might help organisations to balance out the demerits of hybrid workforce model is “The Hub and Spoke Model”. It’s a workplace buzz term, reframing pre-Covid flexible working trend.
lively continuity of workplace in a virtual nation. It helps businesses to stay in touch and keep operating. This also offers flexibility to employees to work closer to their home. This being in practice worldwide with enormous advantages, one demerit that does pop in is- hub and spoke leaders often lose sight of their team's joint potential and the synergy that comes from all members working in the concert. Leaders tend to focus
more
on
their
own
effectiveness
and
satisfaction with each relationship rather than focusing on their team's success.
PAGE 7
This is a clear demand of the people to see their companies invest in technologies. In long run businesses will need to be adaptable and come up with innovative ideas to rebuild workplace and eventually thrive again in the post pandemic world. Hence an organisation may choose to adopt hybrid or the hub and spoke model, but one thing is very clear
that
work
environments
is
dynamic.
Workplaces evolve and crisis force organizations to evolve quicker. Covid-19 has presented a highly obstructive crisis to the traditional work place, stopping employees from going to the offices. It also depends on which industry which model can work. The workplaces have evolved over generations to create the environment for organisations to optimise collaboration, innovation and productivity through new design, technology and policy. Although in this new model of hub and spoke we cannot represent our older workplace but it helps in bringing flexibility in the office and growth in remote work style. Moreover right balance between physical contact and the virtual collaboration can be achieved, by the right technologies. Organization need to help employees adapt the change that is happening in every aspect and in a true sense be future ready for any challenges.
PAGE 8
INTERNATIONAL OUTLOOK ON INDIAN CUT ROSES AND STRATEGIES TO INCREASE TURNOVER PRASANNA VENKATESAN KIRUPAPURI,INSTITUTE OF PUBLIC ENTERPRISE (IPE), HYDERABAD “Bloom where you are planted. Where flowers bloom, so does hope”. India ranks 1st position of global cut rose production
Production:
and China gives a tough competition with India. This
India’s
article
significantly every year.
has
a
brief
research
Indian
cut
rose
rose
production
has
been
increased
production, demand, export followed by a rough financial
plan
and
some
strategies
for
an
Reasons for growth:
entrepreneur to have a favourable cut rose export
The fragrance of rose can create a fresh and pure
trade.
atmosphere creating a soft and sensual effect. (Perfumes and Scent Industry)
Introduction:
Rose is used in preparation powders, soaps,
We are surrounded by plants. During photosynthesis,
creams and lotions. (Cosmetics Industry)
plants absorb carbon dioxide and give out oxygen
Rose is heavily demanded among youth as it the
which is essential for human beings to survive. Rose
symbol of their expression. (Flower shop business
has several importance like a symbol of love, the
sector)
colour of fragrance, precious romantic gift etc. It has
Rose is used for culinary purpose as it helps in
huge value all over the globe.
making products like rose petal jams, rose syrups and rose essences etc… (Culinary Industries)
Conditions to grow: Temperature: 18–30 degree
Rose is certified to be antiseptic and anti-oxidant. centigrade and
sowing temperature differ from 25–30 degree
It contains rich sources of Vitamin A, E, D, C and B3. (Medical Industries).
centigrade. Soil: Well drained sandy loam that are rich in organic matter. Rainfall: 200 mm–300mm
PAGE 9
Figure 1.1, Source: Author Contribution
Figure 1.2, Source: Author Contribution
Figure 1.3, Source: Author Contribution
PAGE 10
Figure 1.4, Source: Author Contribution
Export Trade:
Forthcoming
Even though India ranked 1st in global cut rose
COVID19 scenario:
production, it stood around in 15th position in
China contributed 23.68% of the production of cut
export. In 2018 – 2019 the total export of roses from
roses all over the world after India. Due to COVID19,
India were 41 MT fetching a turnover of around
China is heavily affected especially in the agriculture
Rs.329.93 lakhs. If the same trend continues in the
sector.
next 3 years, it would fetch a turnover of around
agreements with China. Indian companies can use
Rs.277.2 lakhs with 29.2% growth rate. Indian roses
this opportunity to increase their turnover and can
are heavily demanded in UK, Malaysia and Singapore
even try to conquer the Chinese’s share.
Many
export
trade
countries
have
opportunities
cancelled
in
trade
markets. Financial Plan: Roses yield 25 – 30 flowers per plant, in an acre about 5000 plants at an average yield of about 1,50,000 roses. Cost involved in Rose farming per 1 acre: (approximate)
PAGE 11
Cut Rose farming income from 1 acre: (approximate)
Segmentation - Countries selected should have
Note: This income is only through export trade of cut
quick travel time as the perishable goods cannot
roses
be kept in transportation for a longer time. UK,
Cost of production/unit: Rs.4.73 (7,10,000/ 1,50,000)
Malaysia and Singapore have a heavy demand for
Normal Loss: 2000 units
Indian cut roses. So first it is advisable to
No of units sold: 1,48,000 units
concentrate Malaysia and Singapore as the UK has
Approximate minimum selling price: Rs.5
higher travel time. (Geographic segmentation)
Total Revenue: Rs.7,40,000
The research says that the youth of those nations
Profit on cost of sales: 5.73%
see the rose as a royal gift. Hence, we can target them initially and then we can target other cosmetics,
medicine
industries.
(Demographic
segmentation). The rose can follow skimming price strategy as it is Requirements/strategies to have good export trade. Either invest your own fund or borrow the amount from the financial institutions to start the business either in and around Chennai or Bengaluru as they have
less
air
travel
time
to
the
targeted
destinations compared with other cities in India.
not a necessary good and we cannot expect that everyone will come and buy the same. It can be sold at Rs.5. Heavy advertisements are required to mark the arrival of the product. Discounts should be given initially to boost up sales.
Figure 1.5, Source: Author Contribution
PAGE 12
Favourable climate conditions: Valentine’s day is celebrated on February 14th. At that time, roses are heavily demanded in Singapore and Malaysia. However, they cannot grow roses as it would be frozen in a winter climate. Even North India has a temperature below 2.C in winter months. But in Chennai, flowers can be grown even in winter. Due to the sea breeze and humidity in Tamil Nadu, the winter temperature would be 20.C to 30.C. Increasing income through tourism: Garden can be allowed for the tourists to visit, and through that, the income can be increased. This garden makes them sit and relax themselves with their beloved ones in this workaholic environment. If opened, this would be the first rose garden in Chennai. Uplifting Indian Economy: Unemployment is the biggest problem in India. From farmers to educated professionals, everyone would be benefited through this business, and this would at least help the Indian economy a little bit to overcome its unemployment. Verdict: This is the right time to expand the turnover on Indian
cut
roses
through
export
trade.
Every
entrepreneur can follow the said strategies to taste the success in the cut rose business.
PAGE 13
A SHIFT IN THE CONTENT CONSUMPTION PATTERNS AKSHAY KAUSHAL, GREAT LAKES INSTITUTE OF MANAGEMENT, GURGAON
Consumption of content entails the viewership and use
The third is conversations, which is content category
of content information ranging from text information,
that leads to active engagement of the audience . They
video, and visual or photographic information, created
include one-on-one virtual communication, instant
for news, documentaries, social interactions, marketing
messaging on platforms like WhatsApp, leading to
among other uses. The broad definition of content
direct communication between the content creator and
consumption based on the nature of content as well as
the audience.
the multiple channels for distribution and access to
Therefore, given the nature of content and
content implies that it has also existed before the covid-
consumption behaviour, it is evident that the globe has
19 crisis but drastically saw a shift in pattern in recent
been consumers of content from the newspapers,
time.
articles, magazines, television shows an advertisements, There are three broad types of content equally
website content, social media posts and advertisements
with different types of consumers. The first is static or
among others. The global content consumption has
passive content, which is content that does not require active interaction with the consumer like offline and online books, magazines, news articles or information given to inform the public without causing direct interaction like music, television shows, and movies among others. The second is social content, which is content created in a semi-passive manner with minimal interaction between consumer and the device but some active participation in the form of re-sharing, commenting, and liking of the content, as evident on social media pages like Facebook and Twitter Feeds. This content entails feeds like clickbait feeds, inspirational and funny quotes, curated content, and videos among others.
been increasingly steadily at a rate of 5.3% per annum largely driven by the proliferation of new media forms and technology among the masses. Media that has in the 21st century enabled the rapid increment in content consumption- passive, semi-passive, and active- is the internet, mobile technology, and web-based platforms like social media platforms. Today audiences are able to simultaneously consume passive, semi-passive, and active content from media houses like the BBC consisting of offline and online news articles, social media posts on Facebook and Twitter allowing the audience to directly and indirectly interact with BBC newsmakers. Secondly, there has been an increment in
PAGE 14
content
integration
enabled
by
social
and
intermediation
networking
platforms,
globally mobile
technology, and the internet, allowing content creators from across the globe to create and simultaneously upload content from anywhere across the globe influencing news, music, and videos. One notable trend during Covid-19 has been the increased online traffic and viewership of television and mobile audio audiences. According to Nielsen (2020), the need for updated information on the pandemic has driven a demand for on-time and instantaneous content from across the globe. The report finds that between
March
2019
and
March
2020,
global
consumption of news and current events- passive and semi-passive content-, especially of mobile content consumption, had drastically increased at 52% for
Source: Nielsen (2020, 16 Jun)
Australia, 78% for Japan, 125% for Thailand, 180% for Italy, and 215% for the USA.
There are more people seeking online content across the globe during the pandemic than there were in December 2019 Moreover, more people searched and consumed news information and current events during the pandemic than they did in 2019. This is an indication that while content consumption increased, especially for digital and online content, audiences sought out more the latest news and information on economics, politics, and public health issues related to Covid-19 (Weitman & Essling 2020). This is change in behaviour is equally noted with many official websites, non-official websites, blogs, and social media pages promoting banners of semi-passive news and information on Covid-19. The analysis reveals that while audiences have
Source: Nielsen (2020, 16 Jun)
traditionally sought out passive, semi-passive, and active The report found an upsurge or flock of consumers to
or conversational content for various reasons including
digital content in reference to online purchases for new
news updates, advertisements, entertainment and social
televisions, computers, mobile devices including tablets
interactions, increasing more owing to easy access to
and SmartPhones, which coincides with higher offline
internet and mobile technology, Covid-19 has increased
and online content consumption. Owing to the stay-at-
this demand. More people sought out news and current
home orders caused by Coronavirus, more people spent
events content online, leading to a higher traffic for
their time watching television, following live streams
online content. Therefore, the content consumers made
online, finding content information from websites and
a heavy shift from entertainment industry to news and
social media pages, including making online purchases
social media platforms during COVID era times but one
for their food, groceries, and other household needs.
thing always remained constant that, still “Content Is
Nielsen (2020) reports an increment in passive content
King�!
consumption, especially television viewing by 465 minutes per day in Puerto Rico, 450 in the Czech Republic, 348 in the USA, 384 in Australia.
PAGE 15
BUDGET OF A REVIVING ECONOMY: PRESUPPOSITIONS ABOUT THE 2021 UNION BUDGET DEEPANSH BHATI, SHAHEED BHAGAT SINGH COLLEGE “Clawing back on pre covid growth should remain the principle focus” The 2021 Union Budget is around the corner and the
Apart from that, the health insurance has gained
stakeholders are desperately eyeing for crucial and
spotlight in the wake of the pandemic which needs
imperative budget allocations in order to get all
impetus in the budget. Government should increase
cylinders fired for unprecedented pandemic hit Indian
deduction under section 80D of IT Act against medical
economy. The expectations are at an all time high from
expenses to raise up the penetration of medical
the Ministry of Finance while for ministry too, it won’t be
insurance. Mere 1.29% of Public expenditure on health
a mundane task to frame this budget. With economy
sector still remains a galling concern; this should be
manifesting negative 7.5% growth and expectation of
raised to at-least 2.5 – 3% of the GDP to improve the
negative 7.7% growth for the third and fourth quarter,
infrastructure
ministry will have an imperative role to play this special
Creation
year. As a dire consequence of the pandemic, the 5
converging it with CSR Expenditures might bolster up
trillion dollar aspiration might take up a back seat with
the
growth
sophisticated state of the art treatments which over a
and
recovery
schemes
permeating
the
of
health
and a
quality
MEDICAL
of
healthcare
INNOVATION
infrastructure,
quality
services.
FUND
services
and and
upcoming budget.
course of time permeate across the nation.
Today’s economic milieu reminds me of 1991. The
The manufacturing and service sectors are said to be the
situation was much similar and our economy was
drivers of India’s economic growth but have confronted
confronting unprecedented crisis but yet it proved to be
worst ever crisis which considerably blew down their
an unprecedented opportunity which we en-cashed on.
momentum. With second covid wave all over the globe,
With all sectors of our economy barring agriculture
prospects of exports are still low. But good news is that,
manifesting negative growth rate, the theme of this
the sector is reviving. The auto sales, FMCG production,
budget should be growth and recovery. Employment
petroleum turnover of the third quarter have went up.
generation and addressing the concerns of worst hit
The festivities have yet again spurred up the much
sectors should remain the prime focus. In the wake of
needed consumer demand. Highest GST collection for
the pandemic, gaps in our healthcare system were
December 2020 bears testimony to it. Given the steady
exposed. With acute shortage of beds, hospitals and
recovery, the government should not be complacent
ventilators,
needs
about growth in these sectors. The income and
immediate attention. Public expenditure on Pharma-
employment have drastically diminished in these
Research needs a spur.
sectors which needs dire attention.
our
ailing
healthcare
system
PAGE 16
Public Expenditure in the form of investments on
As our current fiscal deficit is already inflated due to
manufacturing and service sectors should be raised. The
reduced revenue collections, one might argue against
startups and the MSME’s were one of the worst hit
lavish public expenditure. But special circumstances
sectors. As these sectors have high multiplier effect on
need
income and employment, this should remain a priority.
fundamentals (good forex reserve, controlled inflation,
Secondary and tertiary sector not only accommodates
declining
formal sector workers but a huge number of informal
government should not fear from raising the fiscal
workers also. Therefore, public expenditure here is the
deficit. Apart from that, direct benefit transfer, income
need of the hour. Also, the budget should ease the
tax relaxation, rates reduction and GST slabs relaxation
FEMA laws to attract the foreign investment. We have
are some of the much needed expectations from this
no doubt performed in the Ease of Doing Business
budget. To create domestic demand and claw back on
Index, yet we have a long way to go as there are more
the pre covid scenario, it is imperative to spur the public
than 4 million cheque bounce cases pending in court of
expenditure and keep aside the fiscal considerations.
law. The government needs to boost and leverage Free-
Rejuvenation of the economy cannot be undertaken
Trade-Agreements. Developing bilateral and trilateral
without a torrent of investments coming from the
trade
moment.
government side and the foreign nations. With all
Government’s denial to join world’s largest trade bloc –
expectations intact, it would be interesting to witness as
RCEP is in stark opposition. Job creation and addressing
to which all gets delivered and implemented efficiently.
relations
is
the
need
of
the
special covid
measures. cases,
etc)
With
the
standing
economic strong,
the
unemployment, especially in the informal sector and at the same time, boosting consumer confidence and supporting MSME’s and Startups should remain the objectives of this budget. Tourism and hospitality industry is one amongst the worst hit. Fiscal intervention in this segment might be helpful for its recovery. The budget should rationalize the GST and extend the business hours. This will act as magnet for the consumers to avail the benefits. A note worthy phenomenon was positive growth rate of agriculture. The rural economy was less impacted than the urban. Hence there stands a need for MGNREGA like scheme for urban poor as well. As far as agriculture sector is concerned, MSP guarantee in the budget, imposition of taxes on Non Farm Trade Areas to provide a level playing field, investments in cold storages, warehouses and transport infrastructure should be the prime focus. This will also give out a positive message to agitating farmers.
PAGE 17
THE STRATEGY AND CONSULTING CLUB OF IIM ROHTAK snc@iimrohtak.ac.in AKANKSHA LAWHALE AMRISH RAI MEDHA WAGH SAURABH AZGAONKAR TANVI RANE TEJASWI NETTAM VARIS KUMAR KALIA ANKIT PALIWAL GARGI GARIMA KUMARI KRITI SETHI MADHU PRIYA MACHADI PARNIKA SHARMA POOJA CHAUDHARY RASTRA KUNWAR MAURYA RUDRAJIT BANERJEE FOLLOW US ON: DISCLAIMER: THE VIEWS AND OPINIONS EXPRESSED IN THIS MAGAZINE ARE THOSE OF THE AUTHOR AND DO NOT NECESSARILY REFLECT THE OPINION OF THE STAKE HOLDERS OF IIM ROHTAK