-SATISH HANDA
Economic stress on the industry arising out of the nationwide lockdown forced by the Covid-19 is expected to last well beyond one quarter according to ASSOCHAM survey. The report of the survey also highlighted that companies are planning deferment or cancellation of investment plans and more employers prefer to retain manpower than those seeking to reduce the head-count. Survey was conducted across different sectors, including manufacturing, infrastructure and services of all type of industry- micro, small, medium and large.
As many as 79 per cent of the respondents pointed towards the economic impact of the Covid-19 extending beyond a single quarter with the lockdown resulting in breakdown in the supply chain – from raw material to intermediates to finished goods and transportation to the consumer destination. ”While we expect major easing of lockdown after May 3, even if some states continue with stringent restrictions, the industry faces a long haul of challenges till the world finds a medical solution to the Corona virus pandemic. Hopefully, India remains among those least affected, aided by several factors like young population, ramp-up in health infrastructure, aided by nation-wide lockdown, though at a huge economic cost,” said Secretary General Deepak Sood.
Sood said, “it goes to the credit of both employers and employees that we have so far avoided displacement of workforce. Companies are resorting to pragmatic solutions like reducing manpower costs and retaining the head count, while employees are responding well to the fast developing situation being among the most important business stakeholders” Survey revealed, the biggest worry, as noted by 33 per cent respondents, arose from the lack of working capital while payment of salaries with output loss and without cash realisation was the second biggest pressure point for nearly 27% industry. When it comes to business revenue, over 78 per cent of the respondents said the impact in the April-June quarter would be the maximum.
As for manpower, the survey noted that nearly 36% entrepreneurs said there would be no change in the head count since the companies would like to retain the human resource for re-opening of the economy. However, as many as 26% of the respondents feel there could be reduction in manpower beyond 20% of the payroll because of on-going crisis. While over 37% of those said they were taking up cost containment initiatives, about 29% told that they plan to defer or cancel their investment plans. A good number of them are resorting to change in financing plans, while the mergers and acquisitions, and remain on low key for now. Key challenges included lack of raw material, productivity loss, insufficient staffing to carry out critical work and limited operations due to transport operations.
