Page 68 - IMDR EBOOK 20 OCT 2020

"Pandemic and Beyond: Naviga ng the New Normal" E - Book Year 2020

loan payments, 52% of the respondents experienced reduction in expenditure by at
least 10% & upwards of 30% in some cases. For a country like India, this reduction in
expenditure is signicant. As the expenditure/consumption decreases, the ow of
money into the economy will also slow down.

3. Expenditures Avenues largely impacted - While analysing the areas on which
the expenditure has reduced, it was found that some of the spends were forced cut
down due to Lockdown in India, like Fuel consumption, Eating Out/Ordering In,
Movies/Entertainment, Socializing, Online Shopping. There are severe travel
restrictions as well as restrictions on sale of Petrol/Diesel with upper limits for
purchase being imposed. Shopping Malls & Movie theatres are closed since mid-
march, as well as social gatherings. While home delivery of food is allowed with certain
restrictions, but people are sceptical about the same. Online aggregators have been
instructed to sell only essential goods, which makes the reduction in expenditure
understandable. It was also found that people are spending more on Online learning as
well as Content delivery platforms for learning & entertainment purpose. For some
people expenditure on groceries/supplies has also gone up, because most of the people
are undeniably panic buying & stocking up more than they need, which depicts the
subconscious fear in the minds of Indian citizens relating to uncertain future.
4. Present & Expected Savings – It was found that there is no change in
saving/Investment pattern for about 56% of the respondents. There could be 2 reasons
behind it. Either most people do not foresee this Pandemic situation to have a long term
impact or the impact on income makes it impossible for them to save more for the
future. Even those who have experienced the changes in their Saving/Investment
pattern, do not see this to continue for more than 3 months. It is also found that the
preferred mode of saving / Investment is Cash or Bank balance, followed by Mutual
Funds & Fixed deposits. Despite a large impact on share market, only 28% people are
investing in equity.
Conclusion & Recommendations:

The Impact of Covid 19 on the economy is devastating. It is not only frightening for the
industries at large, but also creates a worrisome picture related to Individual nance.
While salaried individual are still banking on the assurance of cash inow, at every
month end, though reduced than earlier, the self employed sector is facing more
difculty. At a stage where India is trying to be more dependant on indigenous products
& services & reducing imports, the risk faced by the entrepreneurs does not make the
picture look good for the future.
On the basis of the limited data presented, it can also be concluded that the Urban
salaried individual is not so much impacted by the Covid 19 impact yet. There has been
signicant reduction in expenditure on major avenues, but the same can be attributed
to the Lockdown & might be expected to resume once the Lockdown is over. A
signicant population reported reduction in saving, which is not a good sign,
considering the fact that there is no certainty as to how long the Covid 19 will have an
impact on economy.

The suggestion of the researcher would be, that all Indians need to now focus on
spending as per their needs & not wants. The turbulence ahead can not be accurately
predicted. Also, it would be a good idea to support local business for them to thrive, by
buying more from the local businesses. The researcher would also like to point that,
since the equity market is at very low values, Indians may consider investing small
amounts as per their capacity. This would bring in the necessary cash in the economy,
as well as support the Indian economy. There are good chances of gain once the stock
market lifts up, as the prices of stocks are at all time low. Word of caution is the
investment should be made only after careful considerations of all the factors. For
people who would like to start small, Mutual funds/SIPs could be a good avenue rather
than keeping Cash/Bank balance.

64