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Sunday, April 11, 2021

Mumbai’s trade loss: How Covid-19 is affecting India’s financial capital

Maharashtra chief minister Uddhav Thackeray on Monday boasted about how the World Health Organization and American daily Washington Post took note of Mumbai’s improved Covid-19 situation. The CM claimed that the densely populated Mumbai, along with it’s Dharavi (Asia’s biggest slum), is coming out of the clutches of the pathogen attack and advised “all machineries should be alert to bring the graph of cases down”.

Mumbai’s trade loss

The state of Maharashtra has been India’s grim spot since Covid-19 outbreak began back in January. Maharashtra has always been into the top three states that contribute to India’s daily caseload. Nothing has changed in this in the past five or six months. Maharashtra on Tuesday recorded over 8,000 Covid-19 cases. Though Mumbai’s daily counts have gone down a bit, with around 1000 or 1200 cases per day, Dharavi, which almost wiped out the virus a month ago, has been reporting 10 or 12 cases every day yet again.

Amid all these, India’s financial capital Mumbai has lost much of its trade and commerce activities this year. Be it real estate, hotels, mills or the famous Bollywood for which Mumbai is known globally, all sectors are bearing the brunt of the situation. With the country’s economy already taken a nosedive, Mumbai’s trade recovery is vital. But India’s financial capital is yet to free itself from the virus attack.

Here are 10 areas where Mumbai lost and is still losing its business owing to the Covid-19 crisis.

1. Real estate

Mumbai’s real estate business hit the rock bottom since the pandemic began early this year. According to a study by Knight Frank India, around 42% stakeholders associated with the industry said the next six months will be one of the worst phases in terms of new supply additions across major markets in the country. As new projects either postponed or got canceled, potential buyers withdrew from projects after facing a financial crunch. The current situation brought the industry to a standstill position and the recovery is dependent upon fiscal stimulus rolled out by the Centre.

2. Startups

We all know that Mumbai is home to hundreds of startup initiatives. Owing to Covid-19, the industry faced some unique challenges both from the business and operations perspective. Several startups had to give up their office spaces, launch rotational shifts among other such measures for workers. According to a report by ANI, TiE Mumbai that assists startups in proceeding their businesses has been organizing webinars to share ideas with investors, industry leaders and legal assists to tide over the tough times.

3. Hotels and hospitality

Mumbai’s hotels and other accommodation options such as Airbnbs started to reopen early this month. The government asked the hotels to function with 33% occupancy. The hotels too arranged for elaborate safety measures to draw customers. However, the hotels haven’t made much business yet with the city still recording over 1,000 new infections every day. Though this is an improved situation compared to what Mumbai saw last month. People are scared to venture out and they are avoiding traveling, except for the urgent calls.

Mumbai's trade loss
The Taj Mahal Palace hotel in Mumbai. Photo: Wikimedia Commons

Tourist places adjoining Mumbai, such as Alibag, Panchgani, that are famous for their rural homestays are also losing out on their trades since they mostly depend on tourists arriving from Mumbai itself.

4. Shopping hubs, malls

One of the most affected sectors of Mumbai is the shopping malls and markets. After remaining shut for months, the malls have started to reopen only to face multiple challenges. According to a report, the Shopping Centres Association of India, has urged Maharashtra chief minister Uddhav Thackeray to take concrete steps to reopen the malls fully and allow business. Of Maharashtra’s total 75 malls, almost 50% are situated in Mumbai and the industry has incurred a loss of over Rs 100,000 crore so far in the state, while the jobs of over 50 lakh people associated with this sector are at stake.

5. Media industry

It’s a bloodbath going on in the media industry right now across the country. Mumbai is no exception. Several leading media houses cut short their staff strength or went for layoffs to combat the huge losses. Many of Mumbai’s famous tabloids, broadsheets retrenched regular staff and discontinued stringers. Those with heft pay packages had to suffer around 40% or more salary cuts. As people stopped subscribing newspapers, it rendered vendors and distributors turn into vegetable sellers or look for any other such jobs. Those associated with the print media are concerned about their future like never before.

6. Transport

Mumbai’s transport sector is facing its hardest time ever. Firstly, the lockdown stopped every means of transport, especially Mumbai’s Lifeline, the local train services. Though some transportation facilities have started their operation, it’s nowhere close to what it used to be.

Since the districts in Maharashtra surrounding the capital, Mumbai, are witnessing a surge of cases, local trains cannot operate properly. Similar is the scene for buses and other means of transports. This is leading to major chaos and pain for the commoners. Adding to the woes, app cab provider Uber has shut down its Mumbai office permanently after facing huge losses

7. Mills and factories

Hundreds of mills, factories and small businesses are suffering major losses in Mumbai or in its suburbs. One big example of this is Dharavi. Over 150,000 migrants labourers have moved out of Dharavi since the lockdown came into effect. This majorly affected the MSME, textile mills, small traders and several other such sectors that contribute billions of revenue to the state exchequer. Many factories have either exhausted their capitals and the rest were hit by scarcity of supply, manpower etc.

8. Gems and jewelry

The gems and jewelry sector plays a major role in the India economy. It contributes to around 7% of the country’s total GDP and 15% of the total export. And Mumbai’s gems and jewelry industry is famous for large-scale productions, expertise and export. With Covid-19 spreading like wildfire since the beginning in Maharashtra and especially Mumbai, the industry came to a standstill and export came to nil, making India’s economy even weaker. Retailers are waiting for better days to come which is unlikely at present given the city still reeling very much under the virus attack.

9. Theatre and films

Bollywood is another major contributor to the country’s economy. The film industry is witnessing its darkest period ever with loss of over Rs 1,000 crore of business in the past six months. No films have released for over 100 days, an unimaginable occurrence in the history of the film industry. While top celebs remain busy by clicking selfies or taking videos from their sunlit balconies, many junior artistes, spot boys, suppliers and technicians are facing economic pangs. Though shootings of some soaps and films have started, it is nothing to cover up for the humongous losses anytime soon.

10. Oil and gas

Like the above-mentioned sectors, the impact of Covid-19 in the oil and gas industry is very adverse. Mumbai is home to many major firms of this industry. According to experts, the Indian oil and gas industry is notable in the global context and 5.2% of the global demand. Mumbai plays a major role in it. This sector offers employment to thousands of skilled workers and valuable industry leaders. With the price of crude oil falling and Covid-19 cases spiking in Mumbai, this sector will take more time to recover than anticipated.

Now one might ask, why only Mumbai, all these sectors in other cities are facing similar issues due to the pandemic. Here one simple logic is Mumbai is India’s financial capital and therefore it is a requisite for the city to recover sooner. But the picture looks pretty bleak now as on Wednesday itself Maharashtra recorded over 10,000 cases!

 

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