Post lock down scenario for Employees.

What to expect / foresee :- 

Deferred Pay cut. The cut will be paid at a later date.
Reduction in perks; and permitted values.
Reduction in adhoc staff welfare payments.
Switch to pooled cabs / vans from exclusive car / fuel allowance.
Differential salary ; working at office & work from home.
Reduced declared work days, leading to reduced salaries.

Reduction in Salary ; fixed or differential cuts.
Reduced Increments.
Reduced Bonus.

Cancellation of leave encashments
No Increments
Minimum statutory Bonus; No Bonus (if possible)
and last 
Be Employed ; Lay-offs are possible.

Dhakshina Moorthy K M

Indian Sub-prime Crisis 2020.

US Sub Prime Mortgage led financial crisis.
2006: Home Prices Fall
2007: Banking Crisis 
2008: financial crisis

India

2019 : A flat bought in 2014 / 2015 was sold at 23% less than the purchase; value depreciation. Seller is thanking his god and good luck.

2020 : Post Covid19 , July the same flat may fetch 30% less; if the seller can find a buyer.

Standard housing loan in India
Loan amount : 80 % of the value
Repayment period : 20 years
EMI : 1/3 of monthly income declared.

Today the value of housing asset funded is less than the total loan amount. The EMI paid for the first 8 years is more towards the interest and less repayment of the principal loan amount.

Even after 8 years of repayment, the principal loan amount is substantial.

India has already reached the sub-prime symptoms even before the covid lock down. 

Post covid lock down, there may not be prompt repayments. When the home owner realises the EMI payments exceeded the present housing asset value, it is likely he may default wilfully like in US 2008. The banks will have take possession and auction the assets.

Now there a lakh plus home assets where the homes have not been completed across India. When the home borrower defaults , there is nothing for the bank to take possession and dispose.

Dhakshina Moorthy K M