How to Resolve the IT MSME's Business Loss Due to Lockdown?

Lockdown has been imposed in several phases across India with a view to curb the 2nd wave of Corona, which has been devastating. However, we must keep it in mind that lockdown by itself is no solution to the Corona wave. It only gives time to the government to acquire 2 doses of vaccine for all its citizens. Currently, taking both doses of vaccine and taking all precautions of social distancing, sanitising and wearing masks etc are the only precautions against Corona. Hence, the government and the business community both need to work together to work out a functional approach which can protect the people as well as keep the businesses going on.

Lockdown and IT MSMEs

There has been discontent in the IT MSMEs as they face economic losses whenever lockdown happens. On the other hand, opening the lockdown increases the Corona cases in the country. Hence, a workable middle-road has to be reached. Before we go further on this, it is first better to see what the IT business leaders have been saying about lockdown. DQ Channels talked to the and received diverse viewpoints from them. Some are in favour of lockdown, some want phased opening up, while some want a change in the business style of the IT MSMEs.

Puneet Singhal President, CMDA, New Delhi and also IT Business Ambassador in CAIT, said, "Cmda-Delhi has decided go ahead with the Government suggested way forward with limited staff & working hours if allowed to open."

Himanshu Gupta, Managing Partner, SSDN Tech India said, "Market should partially open with some restrictions."

Vikas Oberoi, Proprietor, Roshni Enterprises said, "If corona virus, black fungus, white fungus has to be controlled, complete national lockdown is required for specific period and for best results .

R Sridhar, MD, Triangle Technologies said, "The lifting of lockdown has to be in a phased manner with businesses having least face to face interactions being given preference. The lifting of the lockdown is directly linked to the positivity index.  Most districts in Karnataka have a positivity of 30+ and unless it comes to the levels below 6 or 7 the restrictions are unlikely to be removed. Masking, social distancing, sanitising & vaccination are a few  currently known defence against the Covid 19 virus."

DQ Channels has received several notes from CAIT asking the government to allow the IT stores to be opened as they argue that IT should be classified as essential services and products.

Sai Rao, President, Federation of IT Dealer's Association, Karnataka said, "IT products are not preferred under governments essential and non-essential lists. IT is the backbone of many of the sectors. But now, all the retails shops across the state and country are all closed. Last wave, we actually had good business. We could manage the overheads and the interest moratorium charged after six months. But now, we have rents to pay, take care of our staffs and also pay the interests. The business in this wave has only been taking place online. But going completely online is not an easy task and has many constraints. For instance, unlike the large E-commerce sites, we do not have a streamlined or organised logistics in place. Indeed, for the IT dealers, we should be constantly updating our catalogue. As I had mentioned earlier, Government needs to be clearer – they need IT products but we should not work. As the President of Federation of IT Dealer's Association Karnataka, I have been talking to all the association in the state, and we all have the same thing to say, the situation looks much bleak than last year."

Terrence S Rajesh, Immediate past President, Confederation of IT Association, Tamil Nadu said, "The businesses are having it worse offline. Last year, we were able to procure a pass from the government and move around to do business as the demand was high due to a sudden rise in work from home. There are many reasons why we aren’t doing well. First, people are scared to go out. Out of 1300 members, we lost 4 members to COVID. We have the overheads to pay and our income is zero. If this situation lasts any longer or beyond September, the situation would be more miserable. Shortage of stocks has caused more issues, greater demand and rise in price. These aren’t particular to the country but issues faced globally. Still the worse impacts are seen in the Tier 2 or 3 cities. We have another issue, cashing out cheques by the National distributors. The cheques bouncing have caused reputational set back to the dealers. Many MSME benefits from the government do not reach the small leveled dealers. Even now for loans, financial statements are required."

Minu Thomas, State President, All Kerala IT Dealers Association said, "The products are available online, whereas we dealers have faced issues with extreme shortages of supply. The prices have shot through the roofs and brands are also increasing their prices equally. We have been closed down for almost a month and half. We were allowed to start business last Saturday in our state till this Tuesday. But the online business everywhere in the state and the sector is thriving whereas we retailers have abundant overheads to bear. We are also in a state where we cannot go online. Each dealer is a separate entity, if we were one then maybe the constraints would be a little less. We also have logistics and supply issues present. We aren’t able to provide services in spite of getting service calls."

B V Deepak, President, Computer Dealer Association, Nellore Distt, Andhra Pradesh said, "We do not have as much impact due to the lockdown as other IT MSMEs in other states. The partners from other completely lockdown states have it much tougher. In Andhra, we have restricted to timing from 6 am to 12 pm and In Telangana has 6 am to 10 am. In this time frame, we are able to work. But when we bill to another state vendor or partner, we are not able to get materials. This is why we have better business than them. But in comparison to the last year, demand is low and prices are high. The prices have risen to almost 10-15 percent. We Tier 2 partners are able to maintain our stocks and brands are able to supply to us. We request the brands to work more closely with the partners to match the demand and supply."

Kshitij Kotak CEO, Fortune Grecells and Founder-Ex-President, ASIRT said, "Rather than showing IT products a non essentials just because online sellers are selling it, we should be working on proving that IT supplies are essential and we should be given a level playing field where we can deliver but not allow people to gather in our stores. Just deliver like OLS does. Warehouse open, deliveries open both inwards and outwards."

Saket Kapur, General Secretary, PCAIT said, "The objective of lockdown should be to shut all commercial /economic activities involving crowding of general public places, be it Malls, retail shops or market places and offices . Operating warehouses and small stores of essential items besides food and medicine with minimal staff with social distancing should be permitted.

The virus led pandemics will not end with Covid-19 as its outbreak benefits some economies and sectors ready to fund the next outbreak. Lockdown to cut the transmission chain shall remain adopted strategy. In wake of this creating virtual markets and commercial centres  are the  need of the hour to survive from bankruptcy and loss of business. Virtual Nehru Place District Centre is required to save physical District Centre.

In my view every popular market/mall should have its corresponding virtual market giving an experience of physical market."