Online businesses can change their business models from making large losses to hopefully making profits.

• By Pramod Bhasin

Ease of Doing Business for MSMEs: Is the concept of resurgent India too far to imagine in these times? Especially in the midst of this mayhem across the world where global trade may have fallen by as much as 30 per cent, GDP growth rates have declined precipitously and unemployment is likely to rise beyond any previously recorded levels; is this a hope that is utterly preposterous? The human race is driven by optimism and hope. We would not exist, were it not for these two traits. So we are compelled to think beyond the current problems the world is going through. I feel that this is likely to be the worst economic disaster of our lifetimes. As you read about how economies have to shut down completely to solve for this virus, can there possibly be any other conclusion? And yet, we must look beyond the current state of affairs and imagine a very different future.

While we fire-fight today’s problems, India Inc and our government at all levels, must also start focusing on the future. Virtually every element of this crisis creates a demand for new and different products, brand-new supply chains, as well as a revised view on global sourcing.

Before that of course, comes survival. We desperately needed the packages that have just been announced by the Finance Minister. I wish this could have come out a month earlier, but nevertheless they are welcome. The total amount announced as a relief package is really principally, a deferment of loans and welcome nevertheless. Even the insurance provided for loans given to the MSME sector represents protection for a portion of those loans, which is how it should be. Neither central nor state governments have any money so it’s understandable that they have not been able to provide direct relief to individuals and small businesses. What they have done is provided avenues for liquidity, which is what is required today for survival. And if we can survive another six to nine months, these same MSMEs can then actually think of growth.

So where are the opportunities? There are plenty of them. Traces will be looking for homes and sourcing away from China. We missed this bus the last time garment manufacturing went out of China and it went to all our neighbours. This time the opportunity will be even larger. But it won’t come to us unless we use this crisis to seriously change the way we have to do business. It is almost unimaginable to an average businessman in our country that in many other countries such as the US, you can start a business, run it efficiently, get into manufacturing, export your products, get the licenses you need, obey the laws, and all of it without having to deal with a ‘Babu’. This is the elephant in the room that we must address. 

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We can talk about ease of doing business till we are blue in the face, but unless we can substantively reduce the paperwork, the permissions, the corruption and need for payoffs, the constant changing of rules, and the enormously complicated regulations which seem designed for misuse, we cannot hope to capitalize on this tremendous opportunity ahead of us. Is the world seriously going to wait for 3 to 4 years while we acquire land to build a new plant, is this what we need to build a modern India? Building a services business, is enormously easier, than building a manufacturing unit or a small business. Can’t we use this crisis to clean our stables, to make our babus more accountable, to tackle corruption in our municipal bodies man across so many governmental institutions?

There are many other sectors of industry which will drive innovation and growth in this new normal. This Covid virus has accelerated digitization by at least 3 to 5 years. Therefore, online businesses can change their business models from making large losses to hopefully making profits, as demand increases on their own as opposed to being driven by heavy marketing and equity dollars.

A whole new variety of online businesses are bound to arise. Education and skills are clearly businesses that will transform themselves. As institutes like Harvard and Stanford start training people online, this can only spur many other platforms to be built for teaching every subject under the sun. These hybrid models can reach every part of the world, provide access to every strata of society, at very affordable price points. Similarly, healthcare is ripe for innovation and disruption in the form of the use of telemedicine, drones for medicine delivery, to remote diagnostics, and the ability to reach remote parts of our country. Couple that with the increased need for better pharmaceutical products, PPE, masks and all the other equipment that we have suddenly become so familiar with. Communications in all its forms will change for the better. We must reflect on the fact that simple technologies such as zoom have enabled us to all come together in unprecedented ways and there will be so many more companies thinking about how to use technology to communicate much more effectively. Perhaps, we won’t even need email any longer.

And to every small business, I would say please find a way to embrace technology. Just as in this crisis, every small business and restaurant quickly converted to become a delivery machine—-every small retailer and restaurant and service provider can also pivot and change and adapt very very quickly. Our demand for products and services remains high, and our population has adopted technology as its basic right.

Pramod Bhasin is the Chairman of Clix Capital and Former President & CEO of Genpact. Views expressed are the author’s own.