The businesses facing a wallop due to slump in demand and zero footfall in the market may take up to 6 months to come back to normalcy.
Even as Cabinet Secretary Rajiv Gauba said that there is no plan to extend the ongoing lockdown beyond 21 days, businesses may have to wait for a long time to erase the scar made by the Covid-19 pandemic. The businesses facing a wallop due to slump in demand and zero footfall in the market may take up to 6 months to come back to normalcy, according to a FICCI survey. While 42 per cent companies estimate that the businesses will come back to a normal pace in three months, 47 per cent companies estimate a time period of six months will be required for this.
6 per cent companies estimate that it would take one full year for the companies to recover to their original pace. FICCI’s survey has also stated that more than half of the businesses in India are hit by the impact of Covid-19 at the early stages. Most of the companies have reported a sudden drop in their orders, disruption in the supply chain, and eventually a fall in cash flows.
However, to facilitate the movement of goods across the country, the central government has allowed transportation of all goods, without distinction of essential and non-essential during the lockdown period. This may bring little normalcy to the supply chain of the companies.
Meanwhile, many international agencies have downgraded India’s outlook. ADB has estimated that the Covid-19 outbreak could cost the Indian economy alone between USD 387 million and USD 29.9 billion in personal consumption losses. OECD, Fitch Ratings, Moodys, and S&P Global Ratings have significantly cut India’s outlook.