Indications of revival in economic activity as states get into unlock mode: Survey

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June 21, 2021 5:12 PM

With states easing lockdown curbs due to declining number of COVID-19 cases, there are immediate indications of improvement in economic activity as companies are hopeful of better performance in the next 6 to 12 months, according to a survey.

The virus resurgence has mainly dented aggregate demand, in contrast to last year when the lockdown also constrained supply.The virus resurgence has mainly dented aggregate demand, in contrast to last year when the lockdown also constrained supply.

With states easing lockdown curbs due to declining number of COVID-19 cases, there are immediate indications of improvement in economic activity as companies are hopeful of better performance in the next 6 to 12 months, according to a survey. About 60 per cent of 212 companies, which participated in the survey conducted by Ficci and Dhruva Advisors, said there was a high impact on their businesses due to the state-level lockdowns.

With different parts of the country under different sets of restrictions and consumer sentiment impacted due to the ferocity of the second wave of COVID-19, an evident dip in demand was witnessed by companies, it added. This time it was not just demand in urban areas that was constrained but even the rural areas saw a compression in demand, according to the survey.

“While the impact of the second wave-induced lockdowns on businesses is clearly visible, there is a silver lining on the horizon…With different states getting into the unlock mode, there are immediate indications of improvement in economic activity,” the survey said. Ficci said that with the number of new cases ebbing and states getting into the unlock mode, there is hope that business and economic activities would regain normalcy in the months ahead.

“Even as we see signs of improvement, we must prepare ourselves well for the subsequent waves….Clearly, vaccination at scale has to be the priority if we have to beat COVID-19 and put it behind us,” it added. For dealing with any subsequent waves, it suggested five measures — ramping up investments in healthcare infrastructure in smaller cities and rural areas; maintaining a sufficient pool of essential medicines; continuing with newly created temporary facilities; strengthening testing infrastructure, and setting up a national facility for vaccine manufacturing with government funding.

The survey also suggested setting up vaccination facilities at airports, railway stations, bus depots, schools and village panchayat ghars; organizing mobile vans that can undertake vaccination in slums, rural areas and planning for vaccination of the elderly and people with disabilities, who have limited mobility, at home.

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