The humankind is currently witnessing the disastrous effect of COVID-19 on the socio-economic balance of the world. It has toppled economic growth and has risked the lives of millions. The tradeoff between the health of masses and industrial activities has been detrimental to the economy. While no respite seems plausible in the coming months, economists, industrialists are dealing with the challenging task of demand creation, above all, economic revival.
India has entered the third phase of lockdown from May 4, 2020, with relaxed norms for industrial activities that come with necessary riders to contain the spread. The Confederation of Indian Industry (CII) is working to mitigate the economic impact to save businesses from the catastrophe and safeguard livelihoods of millions. It recently conducted a CEO Snap Poll to assess the impact of COVID-19 on the economy and industry. The survey saw the participation of more than 300 CEOs, of which nearly two-thirds belonged to MSMEs.
About two-thirds of the respondents expect revenues to fall more than 40 per cent in the April-June 2020 quarter, while for FY21, the expectations of a fall in revenue are staggered, with 33 per cent of the firms anticipating a revenue fall of more than 40 per cent, closely followed by 32 per cent of firms expecting a revenue contraction ranging between 20 per cent to 40 per cent.
Source: CII CEO Snap Poll
The poll also tried to identify key constraints faced by the businesses. Nearly 75 per cent of the respondents identified the complete shutdown of the operations as the major constraint, followed by 53.1 per cent for lack of demand for products.
Source: CII CEO Snap Poll
45 per cent of the respondents felt that it would take more than a year to bring back the economy on track, while 34 per cent expected their own company to recover in 6-12 months timeframe.
Source: CII CEO Snap Poll
Boosting demand in current circumstances is a major challenge before the country. Nearly 37 per cent of the respondents believe the domestic demand to hit normalcy in 6-12 months, while the same confidence for export orders is sluggish, with 41 per cent expecting it to take more than a year to recover.
Source: CII CEO Snap Poll
Securing livelihoods is the prime concern for the country. More than half of the CEOs anticipate job losses in their respective sectors, post lockdown, with nearly 45 per cent expecting 15-30 per cent job cuts.
Source: CII CEO Snap Poll
In a sign of relief for employees, two-thirds of the respondents have not experienced a salary/wage cut in their firms, while nearly 49 per cent of the firms who have witnessed a wage cut said the period of wage cut is ‘undecided.’
Source: CII CEO Snap Poll
There is a need to do a qualitative and quantitative impact analysis of the mitigation efforts to assess the viable economic scenario. CII has suggested a regular review of hotspots to barricade the containment zone and carry-on with the operations in the rest of the area. Bringing back the migrant workers to the manufacturing hubs is also key to reviving industrial processes, which must be coupled with demand creation. CII has been working with the government to bring back the economy on-track and protect the sustenance of millions.
Click here for the CII CEO Snap Poll
Link: https://www.ciiblog.in/economy/economic-revival-amid-covid-19/
