When asked on reviving the economy and how long it would take, Puri said that measures and steps needed to revive the economy would depend on how long the lockdowns last.
ITC’s chairman and managing director Sanjiv Puri is bracing up for a “longish” fight against Covid-19. While the conglomerate that he heads has worked out various scenarios, he is working with a realistic and worst-case scenario to calibrate responses. Like some other industry captains, he too believes that the longer the lockdown lasts the bigger will be the economic impact. He told FE, “We are making an assumption that it will be a longish fight and, therefore, we have to adapt ourselves to a new normal. We have to do business with fewer resources. I cannot predict if it will finish in the first quarter or spill over into the next. We are taking the worst-case scenario and calibrating our interventions.”
In his view, the longer economic activity is shut down or is working at a feeble capacity, the more stress it would put on industry and economy — consequently more support would be required from the government. Supply chains continue to be strained and factories are operating well below optimum capacities as running factories is not easy, Puri said. Even in the essential products category, capacity utilisations for ITC currently vary from 20% to 50% depending on the location of the manufacturing unit. ITC has 120 manufacturing units spread across the country, of which only 70-80 are operating. Puri expects the first quarter to be very bad due to the lockdowns, which will have a substantive impact on the economy.
When asked on reviving the economy and how long it would take, Puri said that measures and steps needed to revive the economy would depend on how long the lockdowns last. His prescription to revive the economy is to to restart economic activity as soon as possible in areas outside the containment zones. He said, “It is most important to revive economic activity by allowing manufacturing outside the containment zones to pick up without restriction on type of industry, because value chains are intertwined and to restart them and to get them to a reasonable capacity will take quite some time.”
Commenting on supply shortages, Puri said that because of shortage of delivery vehicles and people, retailers were queuing up outside their depots to pick up staples as distributors didn’t have enough trucks. Also, given that the virus is continuing to spread, manufacturing units in some places were functioning but there was always a risk of a lockdown if more cases were reported.