Mumbai’s crippled lifeblood
By Venkatesh Raghavan
The price Mumbai is paying for the continued pandemic lockdown may well reflect on the national exchequer’s ability to wriggle out of a deep financial crisis that threatens to last for a seemingly interminable period. The money markets are facing an acute crunch situation. Most private companies in the country’s financial capital were faced with severe constraints to stay profitably operational.
The situation becomes palpable at first glance on how the media houses fared in the city. Hindustan Times effected a massive retrenchment, sacking the staff that handled their Marathi language web news. A few weeks earlier the Bennett Coleman group that enjoys the reputation of having deep pockets, decided to do away with its entire Sunday Times editorial and news staff.
What was happening in the media houses also reflected on how corporates across streams were faced with strained bottom lines. For example, the labor-intensive textile industry witnessed middle-level manufacture and export houses crying soar for the government to hike duty drawback relief on their produce. It’s a known fact in industrial circles that duty drawback support extended by the government is never meant for enhancing bottom lines. It purely exists for the purpose of offsetting the odds faced from unfair global competition. However, in the current scenario, many small and medium-level export units are faced with acute labor shortage and operational constraints faced because of being unable to utilize full capacity. Still worse, global demand on the textile front is also faced with a very volatile kind of fluctuation. The only silver-lining is the peaking of raw cotton exports.
Under such circumstances, restoring normalcy and ensuring smooth functioning of corporate houses in the country’s financial hub, Mumbai is crucial for lending support for the alleviation of the economic crisis the country is facing. However, Mumbai is currently faced with an acute crippling of its lifeblood, namely the local suburban train services. There are two dimensions to this problem. Firstly, few staff members working in PSUs, banks, central government offices and civic services are permitted to use train travel. Secondly, the frequency of local trains as compared to the pre-covid era is very low. Meaning, full-fledged attendance in offices and corporate houses will not be possible any time soon.
When studying this labor crunch crisis, it would become evident on looking at how the hotel and hospitality industry is currently functioning. Though the state government had given permission to hotels for being operational, none of the hotels allow customers to enter their premises and comfortably occupy chairs before their food gets served. All hotels operate on a skeleton staff and cater to only parcel demands from their customers.
Uday Brahme, a mechanical engineer who used to frequent the Irani restaurant for his favorite bun-maska and chai, complained that he misses his early morning breakfast for more than six months. “The worst part is there is no information on when exactly the normal sitting arrangements in hotels and tea houses will be restored. Neither is there any intimation from government authorities nor is there any word of reassurance from hoteliers about restoration of normalcy.”
The commercial angle to this problem was explained by Amir Koolar who runs a restaurant at Kings Circle. “Our industry relies on volumes as food is perishable and its pricing has to be competitive. With no scope for leisure-seeking people visiting our restaurant and with little demand for Irani delicacies as parcel items, keeping the restaurant operational has turned redundant. From across the spectrum, meaning hoteliers throughout the length and breadth of the city are forced to operate on low volumes and margins.”
Given this situation, the revenue losses accruing to the hotel industry alone runs into several thousands of crores. Next in line, still worse hit, is the host of travel booking agents who are virtually forced to sit and twiddle their thumbs. Rajesh Pathak, the owner of a travel agency concedes that business is bad and there are no signs of it picking up anytime soon. Further, he voiced that the aviation industry is severely hit due to low load-factor that adversely affects their operational profitability.
Overall, the crippling of the financial capital is causing colossal losses to the tune of several thousands of crores and restoration of normal train services will prove to be the first step to economic recovery.
