The Corona pandemic has hit every section of our society. The economy is predicted to be on a free fall. Jobs and therefore the livelihood of people would be hit in a way never seen since last few decades. Some economists are painting a rather grim picture and comparing it with the global recession of the 1930s. Eventuality can only be predicted but the reality must not be overlooked while indulging in those discussions. We are sort of well-versed with the plight of labourers and upcoming problems for the industries. Thanks to media for their immense and intense coverage of these issues. But at the same time – the fate of students are least talked about subject. Millions of students across the country (in fact globe) are facing unprecedented uncertainty. The lacuna of opportunity is dim and shallowness of our existing education system makes things even worse. This write up will try to intrude into the details of the Economic fallout and its severe repercussions on the future of graduating students. Going by the Simple terminology – the scope for graduating students lies in either of the three sectors of the market i.e. primary, secondary and tertiary.
Of course, I am adding the caveat that this is only a cosmetic representation of complex reality. The systemic murder of primary sector as a job giving industry has been an explicit fact. There is no such Trend as going to the primary sector after graduation. This has nothing to do with the pandemic but this fact must be stated as the harsh reality. One needs to infuse energy, technology and a bridge the gap between this sector and education.
Then comes, the secondary or manufacturing sector. Some of it is technology-driven and some labour intensive. There is absolutely no doubt about the ruthless economic free fall this sector is witnessing or is about to witness. With my limited understanding of Economics let me declutter the basic tenets of the economy that sustains this sector (and can be extrapolated to any sector). Manufacturing units can only hire if they have enough to pay their employees. This in general terms can be said to be an investment made by that particular unit. Investment in capital and labour that is always needed, and is a prerequisite to oil the economic machinery. Where do these investments come from? It comes from overall savings. One can only invest what they have as savings. The savings come from the sale of products which they manufacture. In a way, it completes a virtuous cycle of investment to savings to the sale of products. One of these three things gets hampered and your economic cycle breaks.
Now coming back to this pandemic, demand has drastically fallen down and because of sustained lockdown, it has only gotten worse. Manufacturing units are not able to sell their products because of the friction imposed by lockdown and fear imposed by the pandemic. Adding to these manufacturing units had to pay their employees regularly. This has jolted the economic machinery by not merely stopping the sale but also doling out the existing savings of this sector. Two of the three pivots of our economic cycle stands fractured i.e sale of products and Savings. This needs huge fiscal and monetary stimulus to get past this situation. A basic understanding of Economics and policy is that there always exists policy lag. A stimulus today will show its result in a quarter or two. The demand for their products has to go up and for that lockdown and pandemic has to go. In order to hire more employees to produce more, they need to be given easy loans(for investment). The Indian government has come out with their economic package to solve the problem of liquidity but the transaction will take time and its effects on the ground will take longer. Till then graduating students wanting to build their career in manufacturing sectors will have to brace this situation. This is the mundane truth which student community has to face.
Coming to our next section which covers the tertiary or service sector, it can be said that it has also taken the beating because of the pandemic. Tourism has reduced like never before. Going out for partying was the focal point of our metros. All this and many more service sectors enrolled in such activities must have incurred huge loss in the last few months. While the dark side of the story can be deciphered easily but, let me point out the positive outlook associated with the economic system of the services sector. Once lockdown is over, people frustrated sitting back home are expected to throng malls and clubs. Tourism to hospitality everything can jump back to business. Service sectors have comparatively less friction to get their business going than the manufacturing sector. But for all this economics to run, fear of pandemic and friction of lockdown has to go. Lockdown can predictably ease but fear is here to stay. So the employment opportunities in this sector will also have to wait.
Reading out the theoretical outlook of the economic situation without real-life examples can hamper the credibility of this write-up. Hand-picked examples suggest that graduating students from IIT are made to wait until the beginning of next year. The economic crisis has thwarted the best business models and has pushed many of them on the verge of existential crisis. Therefore, deferring job offers to elude it till next year has been a new norm now. This I am talking about IIT, imagine the plight of other lakhs of students coming out of normal college. Uncertain about their future, students are taking up online courses to enhance their acceptability in the market. Lastly, COVID-19 has given us an opportunity to reboot our economic models and educational institutions. The unknown inimical attitude of our education system has made the students more prone and vulnerable to drastic situations like this. We weren’t trained to deal with any crisis. Graduates swarming job market have only reduced our ability to respond to the tough times. Crisis creates entrepreneurs and leaders but for that, an ecosystem of self-confidence has to be developed. While the issue related to the education system can be dealt with in another article, but having a robust knowledge ecosystem and entrepreneurial skillset will only be helpful in getting India out of this economic crisis. It’s time now.