Coronavirus in USA Photograph:( AFP )
Government will have to identify sectors that will do well post the pandemic and create jobs in those sectors.
The total number of global coronavirus has increased to over 6.6 million, while the death toll has topped 390,000, according to Johns Hopkins University.
Governments around the world have stepped in to protect the economy of their respective nations.
They have announced financial packages and pumped in a significant portion of the GDP into the system.
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From direct cash payments, assisting corporations to tax breaks and loan guarantees governments are doing all they can to cushion the impact of the Wuhan virus.
India is spending 20 lakh crores which is roughly 10 percent of the country's GDP.
Japan has announced a stimulus package of 1.1 trillion dollars.The United States has a relief package of 2 trillion dollars. Australian stimulus stands at 189 billion dollars. Germany has also announced 815 billion dollars.
Many countries are giving direct cash payments which means money is being transferred directly into the bank accounts of people.
This includes Canada, the United States, Hong Kong, Japan and Thailand.
The Canadian government is crediting 2000 Canadian dollars for four months into the accounts of all those who have lost their jobs.
In the United States, people filing for unemployment, will get a one-time payment of 1,200 dollars.
The federal goverments have also increased unemployment benefits in America.
In India, the informal sectors especifically the migrant workers have taken the hardest punch of the pandemic.
The Modi government is spending 1000 crore rupees on them. The money is being used to provide food, accomodation, treatment and transporation.
Governments around the world are also helping corporations. The idea is to keep companies from laying-off employees.
While the United States has a 500 billion dollar fund to bailout failing corporates, France has set-up a fund of 20 billion euros.
In the United Kingdom, if corporates keep employees on their payroll, the government covers 80 per cent of the salaries which means companies will only have to pay 20 per cent of the salary bill. Denmark has a similar scheme in which the government is covering 75 per cent of employee salaries.
Meanwhile India has reduced taxes such as Tax Deducted at Source (TDS) and Tax Collected at Source(TCS) by 25 per cent. The move is expected to release around 50,000 crore rupees in the hands of the people.
However, these short-term schemes and stimulus are insufficient and governments will have to create jobs in the long run.
A study conducted by the Becker Friedman Institute of the University of Chicago made two crucial discoveries.
Firstly, the Wuhan virus has triggerd the fastest reallocation of labour since World War II.
Secondly, 42 per cent of the recent layoffs will result in permamnent job losses.
Although the study is US-specific but it can be relevant for other countries as well.
While the number may not be as high as 42 per cent but the message remains the same that some of the layoffs will be permanent. This means government will have to identify sectors that will do well post the pandemic and create jobs in those sectors.