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Home >Money >Personal Finance >Opinion | How covid-19 will change us as an investor, citizen

We have many versions of ourselves. We are at once an employee or an entrepreneur, a consumer, an investor and a citizen. And most often the interests of these versions of ourselves can be in conflict. As an employee, I want the highest wage and benefit packages, but as a consumer, I want the lowest prices. As an investor, I want the highest return, which can mean low wages or even lower environment standards, but this conflicts with me the worker and me the citizen. As a citizen, I want the highest level of government services but as a taxpayer I am unwilling to pay my due. The pandemic we are living through right now has broken the status quo across the world. The disruption that the world thought would come from the future in the form of humanoids, has come from the past as a mahamari, a chhoot ki bimari. Terms we have only heard from our nanis and dadis as we would listen wide-eyed to their stories of the past. This disruption will rewrite some parts of our lives and some parts will go back so fast that this time will only be a memory in a few years.

The changes that will be longer lasting than our fear of public places, our habits and our abuse of the planet will be made by capital and the state, but both of these will impact our versions as employees, consumers and citizens. The short-term hit is surely on the hospitality, travel and entertainment businesses that will see the long tail of the pandemic impact. Investors, employees and owners will all feel the bite. For some, it is a net worth issue, for others, it will be a livelihood issue. The longer-term impact will be on the way capital is allocated across various infrastructure functions in a firm.

Let’s take one example to work through the linkages. The lock-downs in various parts of the world have forced those who can, to work from home. An NBER working paper estimates that 34% of US jobs can be done from home. The top five sectors that can do this are professional, technical and scientific services, management of firms, educational services, finance and insurance and information. This changeover will happen as capital will seek its best return and instead of expensive commercial real estate, it may choose to invest in communication technology services. Think of small core offices and tiny working hubs across locations or work-from-home options. For workers, this would mean lower costs of travel, clothes, food and beverage. But it may also mean higher cost in terms of larger homes or making parts of the home ready for work-from-home.

For investors in commercial real estate, it would mean lower return, but those in technology and communication, as well as other distant service providers will see a rise in valuations. Real estate is just one example of the changes ahead due to a reallocation of capital. Almost every sector will witness a change in the way the entrepreneur and investor looks at the post-covid-19 world. Their decisions will affect the worker and consumer in their everyday lives. Workers will need to be alert to re-skill and be energetic about learning the new ways of work. Consumers may look at higher prices as global supply chains give way, or adapt, to the new rules of hygiene and contactlessness.

The pandemic will also rework the citizen-state relationships in India, and that may have an impact on us as investors and taxpayers. As citizens we have had very low expectations from state capacity and the ability of governments to deliver. The low expectations have been built on the back of reality, where indeed for decades the government has not delivered. Consequently, the rich have opted out of and supplemented the government services—education, health, utilities over the years—but a pandemic makes the government’s working essential for everybody. Pandemics don’t look at the zeros in the net worth. The ability to fight the pandemic with contact tracing, testing, isolating, treating patients while maintaining supply chains, policing, utilities and other basic services brings home the importance and efficiency of what a government can do if it wants to. India will re-rate citizen expectations from the government and will want more and better. The government can take a larger role only if it is able to finance it. This would mean higher taxes—on wages, goods and services and investments. The citizen in us gains, but the versions of us which are the consumer, the investor and the worker lose due to the higher taxation.

Once the pandemic and its memory begins to fade, we will begin to slip back into status quo, but for individuals as workers, consumers and investors, we need to remember that this may not be the last pandemic and nothing ensures that these things happen only once in a 100 years. The disruption ahead will only get greater and not lesser—because after the pandemic fears abate, the next round of global events will occur. We need to be prepared with our skill sets, our ability to be nimble and alert as employees and for our money as investors. The long awaited 2020 is here, but maybe not in the way the PPTs in all those global conferences around the future imagined.

Monika Halan is consulting editor at Mint and writes on household finance, policy and regulation

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