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The coronavirus outbreak, and the subsequent countrywide lockdown, has deeply impacted the domestic economy with a majority of firms expecting a significant decline in their topline and bottomline in the current and previous quarters. This will lead to job losses, according to a CII CEOs Snap Poll on Impact of COVID-19 Lockdown on Industry.
The survey was done with 200 CEOs across sectors. The survey results indicate that a significant majority of the firms expect revenues to fall more than 10 per cent and profits to decline more than 5 per cent in the current quarter (April-Jun 2020) as well as the preceding quarter (January-March 2020).
Further, most firms (80 per cent) have claimed that their inventory was lying idle at present. More than 40 per cent of the firms expect their stocks to last beyond a month once the lockdown ends — indicating the firms’ expectations of a demand slowdown in the post lockdown period.
During this lockdown, a majority of the companies engaging in production of essential products and supply of ancillary goods are facing operational constraints. CEOs have revealed that access to manpower and movement of products have emerged as major constraints in essentials trade, be it manufacturing, warehousing and transport, or retail sales of these essential commodities. While the Central Government has allowed manufacture, transportation and distribution of essentials, the lockdown is being enforced at the local level even with regard to essential commodities and services.
Stimulus package
On the jobs front, about 52 per cent of the companies surveyed foresee job losses, in their respective sectors. While the proportion of jobs that are expected to be cut are quite staggered, 47 per cent expect less than 15 per cent job loss and 32 per cent of the companies expect to shed 15-30 per cent of jobs once the lockdown ends.
In view of this adverse industry expectations, “the government could announce a fiscal stimulus package for the industry and implement it on fast track mode, given that the sudden imposition of the lockdown has significantly impacted industry operations and the uncertainty of a recovery threatens substantial loss of livelihoods going forward,” said Chandrajit Banerjee, Director-General, CII.
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