Covid-19 has started changing the way we work and live, which is evident from the recent news report about plans of India’s largest IT services company Tata Consultancy Services (TCS) to make 75% of it’s 4.48 lakhs strong workforce work from home by 2025, hugely up from the current industry average of 20%. Since the TCS is the bellwether among India’s IT services companies, the other firms too will follow the suit which will impact the Indian economy in significant ways as the IT sector plays a big role not only in employment generation but also in overall economic ecosystems.
If most of the IT firms switch to work for home model for majority of their employees than it will affect the Indian economy & cities in multiple ways in both positive and negative manners.
Real estate sector in Tier 1 cities will face enormous setback as the demand for Commercial & IT spaces on rent will reduce drastically. Many spaces will become vacant due to the IT companies either vacating or downsizing the offices spaces occupied by them currently, also the companies will have an upper hand while negotiating rentals. On the other hand, the residential spaces will see an uptick in short term because many people working from home will buy or take on lease new houses which will provide them spaces for work from home requirements. However, in the long term the residential sector will also be affected negatively due to the work from home normal of the IT companies.
Cab services, PG accommodations, shuttle bus services and other ancillary services which have benefited from the big IT hubs will also see be impacted negatively.
The furniture industry will see rise in demand of home office furniture.
As the work from home will become a norm, we will see lesser migration and reverse migration of educated youth from Tier 2 & Tier 3 towns to metropolis which will be at the levels of junior level & middle level IT Wallahs. This phenomenon will by & large affect everything positively.
As people will choose to stay at their hometowns, not only they will contribute to the economic growth of those places thus ushering in more prosperity but they themselves will have a better quality life than what they have currently in places like Gurugram & Bengaluru. They and their families will be happier & more contented as they will be with their parents & extended families which is a bulwark against loneliness, depression and too much stress. The health of the IT workers will be better too as they will not spend long hours commuting to their offices and will be able to spend the time saved in other pursuits. Also, the real estate sector in these towns will see new demand as the workers will prefer to invest their disposable incomes in their hometowns only instead of skyscrapers in the metropolis.
The Tier 1 cities will see lesser migrants thus easing the pressure on their over-stressed infrastructures to some bits which will make the lives of their residents somewhat better.
Are the industries & sectors going to be impacted, prepared to handle the changes ahead?