Several indicators, including goods and services tax (GST) collections, railway freight traffic, petrol consumption, peak power demand and electronic toll collections have mirrored the incipient signs of recent economic recovery in India, according to the Confederation of Indian Industry (CII), which said though still early, these are indeed promising signs.
These indicators point towards a V-shaped recovery in the immediate aftermath of the lockdown, CII said in a press release.
“In order to nurture the nascent signs of recovery, it is important to mitigate the uncertainties that are currently prevailing regarding the restrictions. Corporates are unable to plan beyond a horizon of a few weeks, affecting all operations”, said CII director general Chandrajit Banerjee.
“Although it is not possible to predict the course of the pandemic, a dashboard approach, triggering predictable responses based on the progression of infections, can reduce uncertainty and boost both consumer and industry confidence, which in turn will support demand and investment recovery”, said Banerjee.
To ensure that the supply chains function seamlessly across state and district boundaries, including the containment zones, the latter should be limited to micro areas instead of a wider area, CII said.
“Consumer facing industries, such as staple based FMCG, are likely to grow at 15-20 per cent in FY 21, primarily on account of an increase in in-house consumption of food and greater demand for sanitation and hygiene products”, Banerjee added. In contrast, sectors such as aviation, hotels and commercial vehicles are still quite stressed.
The critical construction sector which has a large employment multiplier impact on economy, is bouncing back too, with most construction sites resuming operations. Commercial real estate is holding up on lease renewals, though new leases are not being signed.
On the services side, the information technology sector is expected to grow at about 0-5 per cent in fiscal 2020-21. Companies in this sector are well capitalised with no layoffs expected. While the growth in hospitals is likely to be flat, the crisis has expedited digital health servicing which otherwise would have taken a few years to actualise.
