‘Second Wave Impacted Business’: India Inc Says Mass Vaccination Is Only Solution To Covid Crisis
With more states in ‘unlock’ mode, there are early signs of improving economic activity and businesses are hoping for better performance over the next 6 to 12 months.
According to the Federation of Indian Chambers of Commerce and Industry (FICCI) – Dhruva Advisors Business Survey, India Inc believes the country must prepare for the next waves and that mass vaccination is the only lasting solution to the Covid crisis.
MORE THAN HALF OF RESPONDENTS REPORTED LOW DEMAND
More than half of those surveyed, around 58%, reported low demand, 56% ‘manage costs’, while 43% said ‘tight financial liquidity’ was a major issue when executing trades .
Businesses, which had just started to return to normal after the end of the first wave, were hit hard by the second wave.
The rapid pace at which the virus has traveled across the country has resulted in a sudden increase in the total number of infections, with the number of daily cases reaching new highs and putting enormous strain on the country’s health system, the survey finds. .
To break the chain of transmission, unlike last year when the country entered a nationwide lockdown, this time state governments have prioritized micro-containment zones and localized lockdowns based on the evolution of the situation on the ground. If such measures were necessary, they had an impact on economic activities.
This time it was not only demand in urban areas that was limited, but even rural areas experienced demand squeeze with 37% of businesses reporting a “high impact” on their sales in rural markets.
Weak demand had an impact on capacity utilization, with 40% of companies recording utilization rates below 50% of their installed capacity.
SILVER LINING ON THE HOROZIN
While the impact of the second wave-induced closures on businesses has been clearly visible, there is a silver lining on the horizon. This relates to expectations about how the business will perform over the next 6 to 12 months.
With different states entering the “unlocked” mode, there are immediate indications of improvement in economic activity. This trend is also reflected in companies’ expectations for capacity utilization over the next 6 to 12 months. The survey results show that nearly 63% of companies expect utilization rates above 70% in the next two to four quarters.
Also see: Vaccine policy 2.0 kicks off with record numbers: what it means and the way forward
THE EXPERTS SAY
Commenting on the results of the investigation, Uday Shankar, President of the FICCI, said: “The second wave of the Covid-19 pandemic has been particularly difficult. It has disrupted the normal functioning of businesses and the management of the Covid has become a priority both at the personal and institutional level. With the number of new cases declining and states entering ‘unlock’ mode, there is hope that business and economic activity will return to normal in the months to come. Even though we see signs of improvement, we need to prepare well for the following waves. Although the survey makes several suggestions, it is clear that ‘large-scale vaccination’ must be the priority if we are to beat Covid-19 and put it behind us. A third wave of similar or higher intensity, as some experts predict, could reverse the gains seen in recent weeks. “
Mr. Dinesh Kanabar, CEO of Dhruva Advisors, said: “The survey reflects the impact of the second wave on the Indian economy and feelings for the future. Although there is an immediate effect on companies in terms of capacity utilization and demand, the industry is optimistic about the future and hopes for better performance. It is important to note that the government has high expectations from the government that we are well prepared for the next waves of Covid-19. “
INDIA INC IS SEEKING THE GOVERNMENT FOR HELP
Even as businesses prepare to improve, the need for government support remains a priority. According to comments received in the survey, the MSME sector has been hit the hardest and there is an immediate need for assistance for this sector.
This view was expressed by almost 65 percent of the companies surveyed. Among other relief measures listed by companies, ease of compliance, moratorium on loan and interest payments and incentives to stimulate demand stand out. On the tax side, some of the key reforms companies want to see include lowering tax rates, reducing compliance, and speeding up refunds.
As the economy improves, it is essential that we do not lose sight of the health challenge for fear of being forced back into another foreclosure, which could once again wipe out the gains made.
Members of Indian companies believe we need to prepare well for the planned third wave of Covid-19 and learn from our experience during the second wave.
INDIA INC LIST OF MEASURES FOR THE GOVERNMENT TO AVOID PANIC AND STRESS
The companies have defined a set of measures they believe the government needs to take to avoid the panic and stress that was created during the last wave. The top five priorities that should form the core of our preparatory work to deal with the following waves are:
1. Increase investments in health infrastructure in level 2, level 3 cities and in rural areas, maintaining a sufficient pool of essential drugs for the management of Covid-19.
2. Continuation of the newly created temporary facilities for the management of Covid-19.
3. Strengthening testing infrastructure across the country.
4. Establishment of a national vaccine manufacturing facility with government funding.
In addition to the above measures, the government should take all measures to intensify the vaccination campaign in the country. The importance given to vaccination by Indian companies can be measured by the fact that almost two thirds of the companies surveyed have launched a vaccination campaign for their employees.
As a result of these efforts, we find that in the case of nearly 62 percent of companies, up to 50 percent of staff are vaccinated with a dose and for 72 percent of companies, up to a quarter of members staff were administered both doses.
As vaccine supplies improve in the country, central and state governments must work transparently to distribute vaccines throughout the country.
According to the companies interviewed, the vaccination campaign in the country can be extended and made more effective by creating more stalls in public places, installing facilities in cooperative societies and encouraging partnerships with companies. Other suggestions include setting up vaccination facilities at airports, train stations, bus stations, schools and village panchayat ghars; the organization of mobile vans that can undertake vaccination in slums, rural areas and the planning of vaccination of elderly and disabled people with reduced mobility, at home.
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