Industrialist Yohan Poonawalla has some strong views against lockdown. He feels there is a need to lift the lockdown in a phased manner across the cities. Poonawalla, Chairman and Managing Director of the Poonawalla Engineering Group (Intervalve Poonawalla Ltd and El-O- Matic India Pvt Ltd), reiterated the delay is causing more harm, then good. He talks to Jescilia Karayamparambil about the impact of lockdown on his engineering and other businesses.
Edited excerpts:
How do you see lockdown impact businesses?
Time has come for the government to lift the lockdown. Otherwise, the consequences of this will be grave. That being said, I do think it is grave already. Of course, human lives are very important. But you have to strike a fine balance.
I strongly feel that many captains of the industry have not come forward to openly speak about the economic implication and repercussions. Even when there are statements put out by industry bodies, it is usually diplomatic. But I strongly feel the captains of the industry should express the issues openly. This will allow the government to realise and accept the realities.
If you just take up the migrant issue, it came up right in the start of the lockdown (continues even now). I think by next month, we will see a huge pay cut. Other than that there will be huge delays in salaries as well. That is when you see double the chaos. There will be a mayhem when this happens, how is the government going to handle it.
Paralysing the city is economic bloodshed. In Dharavi, which is a hotspot where social distancing is a dream, there is a need to declare it as a containment zone. But a whole city cannot be termed as a containment zone. The virus is there to stay. So, there is a need to plan around it. You cannot lockdown the entire country every other time there is a relapse.
If tomorrow the government decides to lift the lockdown partially, would you be able to get back your workforce? Does Poonawalla Engineering group employ migrant workers?
Fortunately, we do not have a large migrant workforce in our business, it is largely local. But having said that, I believe it will have a big impact on other businesses. They will find it difficult to get back their workforce. Once these people go back, they get comfortable in their villages and their families will not like them to return. On one hand, there is this labour issue, on the other hand, it is disturbing to see these people walk to their villages. It is inhumane. But I think time is the best healer. There is no doubt that these labourers will take time to return.
How concerned are you about the Poonawalla Engineering group’s business?
We are concerned as most of our businesses are at standstill. The kickstart is not going to be easy. This is because our customers — oil, steel, food, pharmaceutical and other companies — are spread across the country. And for us, unless all states do not coordinate, the smooth movement of goods is a distant dream. But here, I strongly feel the centre will have to play a pivotal role to coordinate that activity.
Real estate is one among many sectors that are hit. Do we see you invest in the real estate business?
Just before all of this crisis, I was actively looking at investing in real estate. And I was looking at a prime project in the centre of the city (Pune). But now, we will have to wait and see how things unwind. This is mainly because pumping in substantial money into the project will have to be thought through again. I was planning to buy that property as a family asset. I also looked at purchasing an already-constructed asset, but there again the challenge is many tenants are now delaying payment of rents. In this case, the tenant and the landlord are equally affected.
How badly are you affected in leasing space?
Fortunately, we did not see any impact in April. However, we are estimating a hit in the month of May. We will see what happens. At present, the companies have been working from home. While most offices are working from home, the servers they depend on are located in the offices.
Do you think as a business you will test your employees before letting them come back to work?
Companies will have to take basic precautions like temperature taken at the entry point, social distancing has to be maintained etc. But I do not think there is a need to test them.
I was made aware that if a positive case is found in the workplace, there are chances that the authorities will file a case against the company and it will be closed down for months. I feel these decisions are impractical and draconian in nature. Human life is important but there needs to be a balance.
What is the level of dependence of your company on MSMEs?
We are dependent on a lot of small and medium suppliers who provide us with raw materials. Depending on where these MSMEs are located in different parts of the country, they may have a large number of migrant labourers. But I am sure for them getting the labour back and kick-starting will be a major challenge.
Any further delay will just hurt them. There is a need to lift the lockdown in a phased manner but there has to be a plan in place. You cannot have an indefinite lockdown. The government was dynamic in implementing the lockdown, they have to be equally spirited in putting a plan together for quick relief.
What is your view about the economic package?
I do not think the government has really announced a package. If you see other countries, they are announcing packages in the billions but in India, it is not happening. I think India needs to step up and announce an appropriate package.
How do you see horse breeding businesses getting hit?
There is usually a season to buy horses. It usually gets sold between July-September. For our customers, buying a horse is usually leisure or passion. For me, it is business as we breed horses. We know we will take a hit in this business because our buyers have taken a hit. This business will only flourish when the economy opens up. In this business, we will definitely take a hit.