Impact of COVID-19 in India
The outbreak of Covid-19 has impacted the developed and developing countries in a very big way, especially due to the nation-wide lockdown and tight control over the movement of men and material. The entire economy came to standstill during the lockdown period. Now, it is slowly coming back to normalcy after implementing phased relaxation.
COVID-19 IMPACT-GOVERNMENT REVENUES
There appears to be a non-sustainable impact on the global economy, but the revenue receipts of the Government of India indicate a different story. While GST collection was around Rs.1,00,004/-Crores, during the period before the pandemic it reduced to Rs.96,000 Crores, during the severest phase and today it has reached 1.05 lakh crore level. There is a quick bounce back for the government. There have been some serious re-adjustments and the loss to some sectors has been made up by corresponding gains being made by some other sectors. As a nation, we have been able to control the revenue loss and our mortality rate is far below the expected standard and hence, there is a little opportunity available for us to at least put up a smile as a nation.
COVID-19 IMPACT — BOUNCE BACK
On the economic front, the economy is getting back on track. Relaxation from the lock-down is in place and movement of men and material has restarted. Manufacturing is picking up. More focus is on the health care sector to control the impact caused by the disease. Special emphasis is being laid on the return of migrant laborers, who had moved back to villages from towns due to the pandemic. Export industries are deeply impacted due to the discontinuation of flights to different countries. However, once the logistic support is restored, we should be able to pick up export sales also.
As regards the recovery from this slowdown, we are now on the “V” Shaped curve pattern and in another 3 months we should be back to normal and the release of the vaccine would instill the necessary confidence and we will able to do better as a nation. Pharma Industries and Service Industries should be able to generate adequate business. The trust that exists between the employer and employee has grown very well and today we have come to a stage where the ‘work from home’ phenomenon is yielding better results to the employer than before. There is a mixed bag of positives and negatives but today we are at the stage where positives are outweighing the negatives. We should be back in the recovery phase made.
COVID-19 IMPACT -THE STRUGGLE FOR THE CHINESE BUSINESS:
China is a big factor today and the industries which are planning to move out of China should be helped to come to India and set up shop. I urge the government, to look at these industries as a top job creating and an investment opportunity instead of looking at everything connected with the industries as a pure revenue augmenting device. With the advent of GST, the entire system has undergone a sea change. The industry is prepared to comply with all the requirements as long as the requirements are legitimate and simple to comply with.
COVID-19 IMPACT and MCCIA Activities
The MCCIA went on with its programmes and activities during the lockdown period, and enough directives and help were provided to the industries through the online route. Problems faced by the industries were taken to the relevant agencies for redressal and timely redressal through the video conferencing route was provided. It also organized various webinars on several burning issues and received a good response from both the government and the industry.
COVID-19 IMPACT and MSME Sector
The impact on the MSME sector has been severe and the government has come out with a lot of special packages and measures for helping the sector which caters to 80% of the workforce in India. One special provision needed for the MSMEs is to make enough liquidity available to the MSME sector to start its operations. The government has responded and has issued directives to have special dispensation for clearing all payments to the MSMEs suppliers and vendors promptly so that enough money is made available to the employers. Special Loan schemes have been introduced so that they can continue with their operations as before the pandemic. The government has also come out with certain policies like the Leave Travel Concession that are designed to have put money into the hands of employees so that the demand position is created.
We are passing through a difficult time and difficult times demand special solutions. We are working towards registering normalcy and I am very hopeful that in the next 3 months we should be back on track.
(Mr. P. C. Nambiar is the Director at Group EXIM, Serum Institute of India and the Chairman of the Foreign Trade Committee at MCCIA. This is an edited excerpt from the article that appeared in the November 2020 edition of Sampada, the monthly magazine of MCCIA. The complete issue can be accessed at https://www.mcciapune.com/media/Publication/Publication_File/final_Oct_-_Nov_Diwali_Issue_2020_2.pdf )