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  • Category: Miscellaneous

    What happens when no one spends money?

    Without regular incomes, without any social security, people are just about not spending money at all. This is evident from the photos and YouTube videos. Perhaps the owners might adjust to the new normal. They are capitalists and will have some bank balance. But their employees will not. Those who do not have any source of income will look to something else. The servant maids, for instance, will be back. The electricians and the plumbers will be back. Perhaps we will have the recently trained ones also entering such trades. And we will have millions buying something in bulk and selling them to customers within a ten-kilometer radius. Fruits and vegetables are still being purchased by the middle classes. Only such "sure" businesses will survive. No new mobiles, no new books, no new cars and what have you. Those employed directly or indirectly with each of these products will be very poor and will go through the toughest of times.

    Customers cannot be blamed either. The disastrous demonetization and the hasty implementation of GST had already made the worst of economic scenarios. And then COVID -19 took over. Indians, as customers, will be very careful now. Every single pie saved now, will help them to tide over any crisis in the future. But the economy will tank and the net result is that there will be the poor, who will be left high and dry. They might spill over to the streets. This is another big social problem that is going to haunt us for another 48 months, at the minimum.
  • #697549
    The author has mixed up the issue of demonetisation and GST with the present biological threat that is Covid-19. I do not see any necessity of such correlations and mixing, which are actually in a way misleading to the readers as if demonetisation and GST were also as deadly as the present Covid-19.

    Anyway, if people at large do not spend because they do not have money to spend due to the recent unemployment crisis then it would impact the industries and manufacturing units adversely and after some time the economic progress would halt. Only business would be, as author has already mentioned and pointed out in his post, the food and other consumables. That would be a very bad situation as the economy depends on consumerism and in its absence the country would head for a economic disaster.

    Knowledge is power.

  • #697569
    I think the author will always try to bring the issues which he doesn't like which are implemented by the central government. He never leaves any occasion to say the present central government is not good. Whether it is good or bad we have to accept the people's verdict. We are doing the same thing from the day we got independence. We are honouring the majority verdict and continue the same. I sincerely request him not to mix up the things and create a wrong impression.
    Today there is no chance for the people to spend. They can't go anywhere and they can't travel abroad. Slowly the situation may become normal over a period of time and then people will take out the money they have. So we need not worry about that.
    COVID 19 has created a big problem and we have to see how we will come out of it. Many people are jobless and many people are not getting salaries for the last two months even though they have a job. Industrialisation is the only way to create jobs and that is the only way and I think the government is trying to do that. Let us be optimistic and hope that the matters will improve shortly.

    drrao
    always confident

  • #697588
    Now why people do not spend money?
    1. There is no opportunity to spend money even if we want . No business is open due to lockdown.
    2. People are are stuck at home. They are not to go out freely, except for esentials once in a while. So manyearlier needs are now no needs.(eg: vehicle, fuel. transport andtravel, dresses,eating out etc.)
    3. While many have already purchased essentiial items sufficient for some days, the poor and daily wage earners got the government help as free ration and cash. ManyNGOs and philanthropists also help. So with these people can manage for some time.

    However people will start spending once there are relaxations in the lockdown. The liquor shops are open in some states and we can see the crowd waiting to buy liquor. In states like Kerala the shops are gradually allowed to open and after initial hesitation, people have started shopping. In Kerala dailywage earners have started working and earning in allowed areas.
    The present problem is that of increasing cases of Covid and the return of overseas and other state residents and workers. If both are managed well and the positive cases are reduced then there may be more relaxations in the restrictions. The governments have announced revival packages. So the economy wil get revived gradually.

    It all depends how strictly people comply with precautions and guideline to restric spreadof the virus infection.
    We cannot blame government for everythoing, as the whole world is suffering and nobody can come with help.

  • #697596
    #695788, I agree with your explanation. The salaries are not paid and what ever savings was kept for future is bring utilised for present livelihood. Purchase of costly items are apart buying the basic necessities like rice, provisions, milk and milk products and vegetables, materials required for having three meals a day is a great problem as the rates of a few provisions and vegetables have gone high.
    Regarding books and mobiles there are purchases in our area as I see already fifteen smart phones are sold in the last week in one single shop, buying of books will follow when the school reopens.
    Building back the economic as the author suggests will take time. The government has a few plans for working in shifts and stabilising the demand the supply chain with bring a small difference in rebuilding economy.
    The government has given slash in taxes and financial aid for a few companies, tried to raise a helping hand to its citizens.
    Now it is in our hands to save our family and build our financial situation which will in turn take care of the nation as a whole.

    Lead the leader

  • #697607
    This lockdown has closed the doors of income-sources of the most of the people, so they are now fastidious in spending their stashed money only on necessary items like provisions, medicine, mobile recharge etc.

    It gave me a lot of satisfaction to see the general masses during this ongoing lockdown which has magnified the hidden pleasant aspect of human innate quality of being humane and co-perative to each other in dire circumstances otherwise it'd been conceived in a normal way that in this materialistic world people have no more feelings for helping each other, however, many people still remained untouched even after watching needy and pauper, anyways all the fingers aren't equal in size.

  • #697612
    Covid-19 is a global problem. At present, whole world is facing challenge not only economically but every walks of life. In this crisis period , our only aim is to save life at any cost. When our life is safe then we can think about buying or selling. In present adverse situation, where everywhere is lockdown, you can't blame to economy slowdown. Now-a-days , many factories are closed. People have not being paid salary since last two months. A large number number of people have become unemloyed. Around 40 crore people in india are facing hunger challenge because of lockdown imposed by indian government. If people have no money then how can he spent money. On the other hand, some rich people having money but no option is available to spent over it. People are going outside for basic necessities such as milk, medicine, grocery etc..which is necessary for survival of life. Gradually, Govt trying to ease economic situation by removing lockdown step by step. As situation back to normal people would lead a normal life as earlier.

  • #697636
    When the purchasing power of the people goes down or nil, they cannot initiate any new purchasing but this phase will not continue. Sooner or later there would be drastic changes and people would regain what they lost and they also come into normal terms. We only lost 60 working days in our life and that does not mean that lost the opportunities and our talents. When the economy opens up after 31st May 2020 surely India would be vibrating with new energy, new requirements, and within one month every one would get their pay and in July we will be back on rails with new face.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #697652
    The situation is grim only because of existence of the bad phase the COVID 19 and how long such a phase would continue is uncertain. It has created a major hardship to the entire nation with the reduced production in the industries, disrupting the education of our children, retrenchment of labours and maids from their employers. Even the migration of labour from the different places has helped in swelling the upward trend of corona.
    All these effects has blocked the channels of prosperity of the country at large. People cannot go on shopping spree during this crisis time. The role of money is confined to the spending upon food items and vegetables. They are overconcious of the situation and would not like to make any experiment with their deposited money. They would not take any risk in investing their money in some risky instruments either. This trend will continue for at least a year and prosperity will pick up with the enhanced production in all the sectors.


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