Economy

Atma Nirbhar Bharat – An Insight into the Cycle of Demand & Supply

There was a news report from Italy recently. A 75-year old man recovered from Coronavirus attack in a hospital. While he was being discharged, he was told to pay for his respirator. When he saw the bill, he started crying. The doctors around him consoled him that everything will be managed, that they will work out something, and he doesn’t need to worry about the bills. The man replied, ‘I am not crying because I cannot afford it, I can pay all the money. I am crying because I have been breathing God’s air for 75 years and I never paid for it. Now it requires money to use a ventilator and breathe the oxygen even for one day. So much I owe to God. And I never thanked God for that’. The whole room came to a standstill with deep learning. Feeling gratitude for all that we have is in reality a very powerful and empowering emotion.

Indeed the old man’s words are worth our reflection. The current Covid-19 pandemic has yet again exposed our vulnerability towards nature. As if the whole world has come to a standstill. All the technological advancements seem insignificant in the light of the picture that just a tiny micro size virus can change our so-called lifestyle completely. To stop the spread of the virus, our freedom and mobility have been restricted. As the reports say, a new type of virus was detected to affect human beings in China which resulted in the Covid-19 pandemic. The person who is affected with this virus feels blockages in the respiratory system. One who is immune enough fights the attack by the virus and gets recovered. One who is not immune enough gets succumbed to the severity which might result in death. Reports claim that these cases were first detected in December 2019 in China and spread to the rest of the world in the following months. So, the governments around the world decided that they would lock down their nations to save their citizens. The situation is alarming and showing us that we are dependent on something bigger than what we think. Have we taken all the things for granted? The demand-supply curves have been adversely affected. Industrial output and the gross domestic product have hit an all-time low. It became even more worrying when crude oil was trading negative for sometime in April.

In light of the current scenario, we need to re-look at our supply chain dynamics and shape our economy. We need to redefine our strategy to become self-reliant. Atmanirbhar Bharat is certainly possible if we work on our fundamentals. Since many companies are looking for options beyond China for all the manufacturing operations, we in India got a great opportunity ahead of us. And to harness the chance well, we have to rethink our policy and approach. The fluctuations in the prices of daily commodities have always been in the public eye. Apart from the pandemic, price fluctuations especially in the agriculture sector may arise due to natural phenomena such as floods, famine, or extreme weather conditions. India has a huge domestic market with high consumption, and dependency just on the natural availability of resources for socio-economic activities hampers growth. This has seen some of the major shifts in the socio-economic policies of the government to help sustainability. At the grass-root level, all this is a great experiment of demand-supply cycle: check what resource is scarce in a particular area; research where that particular resource is abundant, and reroute the resource to the place where it is scarce. This is what we have seen happening in the past and will continue to happen for generations to come. We have seen a fluctuation in prices happen year after year for all the agricultural products. There is a surge in prices of onion particularly during monsoons when the production cannot match the requirement. And our Agriculture Produce Market Committees are always full of such stories of rise and fall. This happens with petrol, diesel, cement, and steel as well. But essential get more attention and make the headlines.

What we notice is that the supply of necessary resources for survival has always been abundant in the universe. However, there is a cost associated with the routing of these resources, and such cost varies across different places. Consumers don’t stop buying essentials just because they are scarcely available, remotely available, or in a different form. They would either pay more or deriving alternatives – the feasibility of which creates business opportunities. The ease of use and accessibility of conventional fuel like petrol, therefore, wins over non-conventional sources like solar energy.

The recent pattern of migrants returning to their states will shift the demand-supply curves substantially. Economic growth, which previously came with massive urbanization, will now be seen in a different way. If we can make all the basic necessities like food, water, shelter, Internet connectivity and some employment opportunities available within rural areas, a good number of migrants might just stay back and it will indeed reduce the pressure on our larger cities. The state governments can establish clusters and manufacturing hubs within small villages, which will undeniably put the economy back on track without relying upon cities as much as in the past. This would also avoid over-crowding in cities.

As the saying goes, we always tend to desire something in contrast to what is available naturally. We want cold in hot and tropical regions – a major market for air conditioners and coolers. We want heat for survival in polar regions – a major market for heaters. We now want health and hygiene during the Covid-19 pandemic – a great market for the pharma industry. Though some drugs have been released in the market in large quantities to cure Covid-19, the time and place where they are desired will determine the cost to the end consumer.

In the times to come, the demand-supply cycle will shorten and there will be increased awareness in the purchases of the future. For larger sustainability, businesses around the world will have to accommodate themselves according to the shift in consumer behavior. The use of technology and Internet penetration is massively enhancing consumption patterns. It will truly be a testing time for industries and institutions, and in reality, only the fittest or those that can adapt faster will survive.

The 20-lakh crore rupees economic package declared by the central government will surely be a great boost to the nation since the money circulation that slowed down will again gain momentum. New dynamics of demand-supply cycle will emerge. Disruptive, innovative and collaborative consumption will shift the lines of the economy. We have to wait and watch whether new forms of localization (rather than globalization) will emerge that will determine the demand-supply curves.

-Ankush Jaju (One of the winners of Covid-19 Article Writing Competition in the 25-34 Age Group)

Picture Credits: economist.com



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