Every one of us is cutting their hairs at home. Most of our wife went for becoming BARBER & hairdresser for us. Selfies were taken proudly. This is the memorable 2020 activity of the year or memorable of the decade. As a professional of every domain one needs to understand and have some clarity on the below-mentioned areas so as CMA or any professional you are able to face the bouncer to strategy formulation for your clients. This article is helpful for those to get an advisory note for their clients and provide initial mental accounting framework for the clients as well for you. This article throws light on the brutal facts and your advisory strategy for your clients. This article belongs to the job and practice segment both.
Medicine and not Vaccine
The lockdown is being relaxed and the risk of infection increases simultaneously. Indian has poor health education and our behavioural aspect does not give us an instinct of social distancing. A question comes then how long one will be under lockdown. That’s up to you and don’t blame the government later on. More than vaccine the world needs the medicine to cure the disease. The combination of medicine is the demand of the time. The vaccine will take time and vaccination is the next Herculean task which will take more time. Sanitizer, mask, washing of hands, social distancing are the new norms but depends upon who will be abiding.
Leadership Challenge
The global economy is under the leadership challenge where the most debatable part is to unlock the lockdown or maintain the same. New leaders will be born in the coming days who will manage this dilemma properly. The global economy is under the battle of relapse and recovery of the economy. Relapse will take away the political careers and delay of recovery of GDP will dethrone many leaders. The recovery of GDP is more dependent upon the relapse part rather of recovery. Since the latter is not going to pick up within the next 6 months even.
Failed Mono-Policy
Investments are redeemed to pay back loans so as to balance the salary cut impact on the EMI and household balance sheet. SIP is simply stopped and financial goals have taken a wild swing. The moratorium offer of India simply failed. The global economic stimulus packages are enough supportive compared to India. Well, the proof of the pudding is in eating and this will taste will be known to everyone in the coming days. Salaries have been reduced /restructured with a topping of job cuts to add more fuel to the pain of the household budget.
PRE-Covid capacity levels –Challenge Itself
The economic activities will be low as demand is now not consumed but to save. Across any country, this is now the new principle being followed and adopted by every family. Hence as demand is low, I will not borrow even at free since I have nothing to apply that capital to utilise. Free money does not help. Unless I have demanded I will not even go for Pre-COVID production capacity. The Pre COVID capacity levels are itself a challenge. Manufacturing and GDP growth will happen only when UP, Maharashtra, Rajasthan, Noida & Gujarat opens up and comes out of lockdown. This will take time and hence GDP growth is dependent on that and simultaneously employment.
Monsoon will slow down demand more for Infra space and hence Q2 of FY-21 is also gone. All hopes now in Q3, Agri is now the biggest hope for migrant workers. The fate is yet to be decided based on the output. Floods situations in monsoon will damage the growth and state & central budgets more in the coming days. Deficit number speculation is now betting game.
Government revenues will be low as Indirect tax will be low due to lockdown and post lockdown it will be the lowest in the history of the Indian economy. Govt. revenue from Individual taxes will also be low as salary hikes are ruled out and pay cuts followed with unemployment to have come up
Conclusion:
Promise less and show the picture to the client in more detail terms. Reschedule and re-plan business strategies and production planning. The client needs your support and presence. Use this time to convert your client into a friend rather just keeping him as a client. Advice and strategy are required for your client. Forget about the monthly or yearly billing. Be prepared for the delay but focus more on the business of the client rather on personal. Facing the brutal facts is the key demand of the time. This will reduce the nightmare and will give clarity to think more properly on how to formulate new avenues and strategies. Use every penny with relation to cost-benefit analysis. In my next article, I will share how Strategic cost management tools need to be adopted at job level and practice level
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