Lockdown - Will it happen again?

Greetings to You! I trust that you are doing great. I am immensely happy to write yet another article on a whole new subject that talks about a persons authority and their limitations. I find it extremely difficult to squeeze the content in a one-liner, so please read it through till the end. 

Let me start with a true story that would undoubtedly be relatable to you that I wanted to share for a long time. At the time of Covid spread, each nation and their governments had taken radical steps abruptly to contain the rate of infections. We all were spellbound by the renewed beauty of the nature around us, as the rare and wonderful birds were sighted near our homes, and the clouds were bright and colourful. The steps taken by the Government were very creative with less to question against.

One of which is the Lockdown that spanned for almost six months where almost the whole country(India) came to a standstill. All of the industries except those that involved manufacturing and servicing of essential goods were locked. People had to move back to their homes with great difficulties as transport services like trains, buses and flights were suspended indefinitely overnight. Looking at the good side of the lockdown, those who had the essentials met had a great time of togetherness with their families. Marriages were executed with minimum participation and I guess the rate of newborns took new highs during those months or towards the end of the lockdown. 

On the other side, migrant workers were stranded in the industrial towns where they were employed, few were lucky enough to go in the Government provided special trains and flights to get back to their hometown. Some even tried ways of walking between states which was very unfortunate. State borders were closed with strict orders from respective district collectors and policemen were given privileges to take strict actions on trespassers. Special requests were even hindered and one needed to obtain permit letters from both the states with vital reasons. A personal instance that happened to me was my mother was not allowed to be taken inside a city where a specific medicine was provided for curing her sickness. 

We all suffered and we all endured together in the battlefield of this pandemic. The climax has taught good lessons to everyone. 

Once things were back on track, the Government lifted the lockdown and things were gradually granted permits for industries to be opened on a proportionate basis. 

As we all know, the decision of a lockdown in a country that aligns with global market and indices and has got money as an exchange of goods and services is subjected to a big consequence. The banks operate on an interest that is decided by the consortium (RBI) and it goes up and down based on demand and supply of goods in the country. 

The cumulative absolute gain for a bank is the interest on loans provided minus savings interest offered for a given period. 

As the lockdown was an order by the Government, a citizen of the country has the right to defer his repayment of loan during the period as there was no economic activity and the citizen was forced to not attend his regular remuneration generating vehicle. 

In simple words, the Government had disallowed people to earn money as the lockdown prevented them to work or do their business. 

This applied only to those type of income generators that required people to work. This does not  apply to income generators such as rental, asset appreciation, etc. 

The Government instantly approved the deferment of consumers and business loan repayment by a period of six months. The supreme court ordered banks to offer the same for all active loan borrowers calling it a SIX month loan moratorium. 

Now comes the additional challenges involved in this. As a standard, if a loan needs to extend for a period of time, the interest gets recalculated which adds a portion to the EMI for the extra duration or the tenure needs to be stretched because interest is a function of not just the principal but also the time. 

This conveys that the loan borrowers are supposed to pay the additional interest for the deferred six months period on the existing loan balance. Sounds difficult but it is something that needs to be adhered to as per the banking principles and economics. 

Who is supposed to bear the cost involved in the loan moratorium? 

Is it the bank? Is it the Government? Or is it the loan borrower? 

Let us get to a case that was filed on the very same subject by a citizen from Delhi who requested an answer on this with a clear reason stating the additional interest or the interest on six months extended period is not supposed to be fined on the loan borrower. 

It is the Government who paused my business. It is the Government who stopped me going to work. 

This indirectly says the Government has stopped my wages. I have not received my salary because I couldn't go and was not supposed to go and work.

The case has drawn attention of all active loan borrowers, banks and the finance ministry. The case seems to never end as the responsibility can neither be put on the loan borrower nor the banks. 

It is a fairly good expectation that the Government needs to bear the interest on interest for the period of the moratorium that can be called cost involved in the lockdown initiative. 

What did it teach me?

Let us draw a parallel between the consequences faced currently by the Indian economy due to the loan moratorium and the after effects of children's future due to the decisions made in their day to day lives by the parents. 

Indian parents are very good and dedicated in bringing up their children with good education. The people of India are very blessed and fortunate to be a part of an era that is rich in culture and diversity. 

Let's look at what is happening post-liberalisation economy where at least one in a family is employed or has got the ability to turn a business into profit with the resource and aids provided by the Government. (The claim of the period of shift may not be accurate here.)

Back then, people struggled to get a job for survival and hence children under eighteen were forced to work overriding their school days and formal education. 

Due to the scarcity of resources for sustenance, the survival was difficult for a lot of people. 

Things have changed and it is a lot better now. The access to resources have taken new shape and transformation which has also helped the child-labour prevention laws to be enacted. 

This very fact has made Indian parents perceive or take a new look at a teenager attending a job to be a menial. A teen working in a job would portray a family in poor light. As that of a family that is struggling.

This has made the parents not permit their young children to go out and try something out in the market.

The world is taking new twists and turns almost every decade and your decisions and actions may not stay favourable over a long time.

And hence, the directions set by parents is what I am associating with the loan moratorium and its consequences here. 

A young person could go and take up a marketing job which is a good skill to carry. On contrary, it is considered very dignified and impressive once the child completes MBA and takes up the same job in a company like HUL / Coca-cola / ITC. Had it been a case where the child had been exposed to a variety of large and small scale industries, the way of growth would have been more organic and the way of looking at his job would have been different. 

I do not count the MBA degree to be of any less value here. The point is that children should have explored all walks of business at various scales. Why is the blame on MBA here? No, MBA was only a sample instance here. I wanted to speak of Indian parents not letting their kids go and try some menial jobs during their children's free time. 

I hear a lot of stories from my circle that is all about how people are struggling to get a job in the current situation and that a lot of people have been fired. Some are satisfied with the jobs that the aggregators are flashing it to young people like Swiggy and Zomato. I don't deny the fact that they pay a fair wage for survival but it is not something fulfilling or sustainable in the long run for a family in India. 

The point here is parents should be encouraged to let their kids to go and try out things in the society. A person who is not permitted to go and get his hand dirty will endlessly feel difficult to do a job later as the immediate value / outcome of his new job may not be easily attained. 

If a parent doesn't allow his kid to try something of their want like to try a sales job, newspaper vendor, etc. And if the child fails to be qualified to be a fit in the future, the parent is solely responsible for the failure. 

Because, the brain grows with exploration and excitement of new things. If the labour and effort are not aligned with those explorations, and when they are suddenly met with a huge baggage of responsibility and ownership, the tendency to fail is high. 

A parent who doesn't let his children to work when the child wanted to work, then the parent becomes responsible for his whole life from there. 

If a person interferes in a child's choice of things like buying gadgets, or the higher studies. Please keep in mind, the parent is held responsible for the child's future again. 

Anyone can take decisions, but what's important is to be aware of the repercussions and take full responsibility. I'd like to point out that decisions are important not only to run a country at the macro level, but it is extremely important in our careers and family lives at the micro level.  

Answer to the question: NO. It cannot. 

Love, 

Jeffry Copps