The coronavirus pandemic and the subsequent government-imposed 21-day nationwide lockdown have deeply impacted the domestic economy, with a majority of firms expecting a significant decline in their top line and bottom line in the current and previous quarters, demand to decline and jobs getting impacted, according to a CEOs’ Snap Poll conducted by the Confederation of Indian Industry (CII).
According to the survey, around 52% of top corporate bosses in India anticipate that job losses will occur after the nation-wide lockdown is lifted. The survey also found that 46% of the CEOs do not expect job cuts while the rest 2% are not sure.
“About 52% of the CEOs anticipate job losses in their respective sectors post lockdown. 47% of the firms expect up to 15% job losses and another 32% expected 15 to 30% job losses,” said the CII survey.
While the proportion of jobs that are expected to be cut are quite staggering, a significant share of firms polled (47 %) expect less than 15 % job loss, CII said. However, a worryingly high 32 % of firms expect to shed about 15–30 % of jobs, once the lockdown ends.
The electronic survey saw a cross-country participation of close to 200 CEOs across sectors and indicated that a significant majority of firms expect revenues to fall more than 10% and profits to decline more than 5% in both the current quarter (Apr-Jun 2020) as well as the preceding quarter (Jan-Mar 2020). The expectations of this sharp decline in both revenue and profit growth by domestic firms could foretell the significant impact of this outbreak on GDP growth.
Further, the survey found that much of the inventory of companies are lying idle. However, more than 40% of the firms expect their stocks to last beyond a month once the lockdown ends — indicating the firms’ expectations of a demand slowdown in the post lockdown period.
The CII Poll also shows that access to manpower and movement of products are the major constraints in essentials manufacture, transport, and distribution. Companies involved in the manufacture of essential services have said that there is a major constraint in the manufacture, transport, and distribution of goods. While 65% have said that there are constraints in the movement of goods, 35% have said that there are constraints in access to manpower.
Commenting on the survey, CII Director General Chandrajit Banerjee said: “The government could announce a fiscal stimulus package for the industry and implement it on fast track mode, given that the sudden imposition of the lockdown has significantly impacted industry operations and the uncertainty of a recovery threatens the substantial loss of livelihoods going forward.”
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