Shared Economies in the Post-COVID India
The shared economy was particularly affected by the COVID-19 pandemic because of public-distancing measures that made it harder for Peer-to-Peer services to operate effectively. Ride-sharing platforms and co-working spaces had to stop operations or reform their business models in order to meet this impending challenge. In the Indian context, the thriving sharing economy came to a halt because of the pandemic because people could no longer employ their personal assets for business purposes without also accruing health risks. For major companies like Swiggy, Zomato, Uber and Ola, the fall in consumer demand during the pandemic resulted in reduced profits and sales. But in post-covid India, the need for the sharing economy has bolstered the operations of these companies. What has particularly helped these companies has been the demographic shift in cities. With the pandemic coming to an end, more and more millennials are flocking back to cities in search of job opportunities. Due to inadequate resources, the sharing economy is the perfect solution for this demographic of consumers. The low operational costs allows such enterprises to keep their prices substantially low, making them the perfect fit for financially struggling millennials.
The need to reestablish and revamp essential global supply chain links has also bolstered Indian manufacturing hubs. The Indian manufacturing sector has seen massive gains in exports, touching close to 418 US dollars in the financial year 2021-2022, a rise of almost 44% from the previous year. What has specifically helped small scale businesses and manufacturers has been the government’s initiative to connect them to digital supply chains. Through digitisation processes, such companies were able to participate within the global supply chains, manufacturing essential goods for large-scale conglomerates.
India’s on-ground manufacturing processes were also substantially hit after the pandemic. Going back to normal would require that the reopening policies guarantee workplace healthcare protections, especially because adverse health-related issues will certainly reduce workforce efficiency. It’s also essential to resume economic activities because the lack of employment opportunities usually translates into a wider burden on the social safety net. What is needed is a granular and locally driven lockdown strategy that is able to contain the spread of the pandemic wherever it occurs without relying on national measures that adversely impact the economy. More importantly, the government must strengthen local health preparedness in order to respond quickly to any possible outbreak. It will also help if the government establishes key labor corridors to allow the sharing economy to function through selective measures that permit mobility for essential workers employed in such activities.
Sources:
https://www.ey.com/en_in/tax/economy-watch/why-india-is-gaining-clout-in-the-post-covid-universe
https://economictimes.indiatimes.com/news/economy/foreign-trade/india-exports-rise-to-record-high-of-usd-418-bn-in-fy22/articleshow/90623780.cms
