The tumult of Samvat 2076

Few would have imagined the tumult of 2076 when trading starting on October 27 last year. The first signs of tumult were already visible since November but all hell appeared to break lose once the markets digested the significance of the COVID pandemic. Since Dec-19, over a million lives have been lost and trillions of dollars have gone in the form of lost production and productivity. Job losses have been a reality across all the world economies and India has not been an exception. The pain was a lot more.  India had to put up with negative GDP growth for the first time in 40 years in the Jun-20 quarter. Most experts project GDP to contract by 8-9% in FY21. That almost puts India back economically by 3-4 years. Since March, when lockdowns were announced across India, millions of workers lost their jobs, savings even as serpentine queues of workers had to walk hundreds of miles on foot to reach their home towns. Apart from the real humanitarian crisis, there were sectors like retail, tourism, hotels, entertainment and aviation that got structurally hit. 

But there were learnings too

It is said that best business practices are normally cultivated in bad times; not in good times. That was true of Samvat 2076 too. Individuals learnt how to run a tight ship. Businesses were forced to cut flab and rethink their spending plans in the absence of revenue visibility. The result is that in the September quarter most Indian companies have been able to show better operating performance despite lower sales revenues. Indian companies are embracing technology like never before and working towards cloud storage, distributed workplaces and reduced travel. Let us not forget that the lockdown also meant that most Indian families were forced to lead a life that was healthier and fitter. 

Above all, there is hope

In the midst of all this tumult, certain things stood out. The appetite for equity and equity funds increased like never before. This was evident in consistent SIP flows and the surge in new demat accounts. Foreign investors have kept their faith in the Indian economy and the attractiveness of Indian markets. Industrial production and company sales have bounced back sharply, almost back to pre-COVID levels. Despite all the tumult, India did not descend into chaos or despair. Indians kept their faith in the state and the state kept its faith in the people. That gives us the big hope as we embark on a New Samvat year!