If profits are falling how will they repay loans?

WFH or Work From Home has become part of everyday language since the coronavirus pandemic broke last year. "WFH means an employee is working from their house, apartment, or place of residence rather than working from the office." It seems to make sense. The company saves huge sums of money in renting office space and other bills, like electricity and maintenance, while employees save money and time from not having to commute everyday and can choose their working hours. "The interesting thing is that the work-from-home model might continue even after the pandemic ends," wrote Vivek Kaul. Which will result in loss of service jobs in maintenance, cleaning, cafeterias, cab services and drivers. If people stop commuting, sales of cars will fall and a fall in demand for office space will lead to a drop in construction. India has over 50 million (5 crore) workers in the construction industry, of them about 35 million are registered. Analysing the effect of the pandemic on economies, "If the impact on the poor in rich countries has been severe, in lower and lower middle income countries, it has been nothing short of devastating," wrote Prof Vivek Dahejia. Pew Research Center has compared the economic effects of the pandemic on China and India against what would have been expected had normal economic growth continued uninterrupted. Taking an income of less than $2 per day as a mark of poverty, the study showed that 1 million people in  China fell into absolute poverty while "30 million more people were pushed into low-income (but not absolutely poor) category". In India "a staggering 75 million people were pushed back into poverty by the covid crisis -- this is almost 60% of the global total increase in poverty caused by the pandemic". In response, the Reserve Bank (RBI) has kept interest rate at 4% and maintained an "accommodative stance", while predicting a retail inflation of over 5%. This is expected to encourage private companies to invest in new capacity financed by cheap borrowing. To help the government, "The RBI announced a Rs 1 lakh crore (Rs 1 trillion) bond-buying plan to keep a lid on long-term interest rates amid a massive government borrowing programme, even as it held policy rates steady and retained an accommodative stance to underpin the fragile economic recovery," wrote Gopika Gopakumar. "The trouble is that, "In the last few years, the lending by banks to corporates has been more or less flat, which basically means that net-net barely any new industrial lending has happened," wrote Vivek Kaul. "This stems from the fact that the profits made by corporates as a proportion of their total income has been falling over the years, giving them lesser incentive to borrow and expand." "If we look at listed corporates, data from the Centre of Monitoring Indian Economy (CMIE) points out that the profit after tax as a percentage of total income peaked at 10.21% in 2007-08. It fell to 5.44% in 2015-16 and further fell to 2.88% in 2019-20." One reason is that GDP growth rate has fallen from over 8% in 2016-17 to around 4% in 2019-20, and growth of Private Final Consumption Expenditure (PFCE), which had a share of 57% in India's GDP, "collapsed to 2.7% in the March 2020 quarter, the lowest since June 2012", wrote Roshan Kishore. "Consumers turned more pessimistic about the present and less gung-ho about the future, making them less likely to spend in an economy that's driven by domestic consumption," reported Times of India. "The best-laid plans o' mice and men gang aft agley." Especially if men are mice.