The Economy is Recovering but the Uncertainties of ‘Mini Lockdown’ over the Devastating Covid-19 Uprise are a Road Block- CII
The global pandemic had brought the entire world at a standstill. Many ongoing construction projects came to a standstill. Now that the country is in the third phase of the Unlock process, the economy seems to be recovering itself in tiny steps. The Confederation of Indian Industry (CII) said there are early signs of economic recovery but a tough road to recovery still stands ahead. However, the uncertainties associated with ‘mini lockdown’ should be removed since they are acting up as a roadblock for economic recovery. It should proceed by allowing business activities that are already in process.
The activities in Containment Zones should be limited
CII Director General Chandrajit Banerjee said that supply chains should work radically within the state and district boundaries. For this, the containment zone should be limited to small areas instead of large areas. “It is important to reduce the uncertainties of sanctions to make early signs of recovery a reality,” he said. Corporate companies are currently unable to plan for more than a few weeks. Their operation is being affected by this. Changes have been seen in various sectors with sectors such as pharmaceuticals, fast-moving consumer goods (FMCG), and agriculture.
Some sectors are still in bad shape and worse times
Banerjee said that mainly in-house consumption of food and increasing demand for sanitation products are showing. With this, the FMCG sector is expected to grow at 15-20 percent in FY21. In contrast, he said that sectors like aviation, hotels, and commercial vehicles are still going through a very bad phase and the situation is expected to persist.
Construction area more affected
The construction sector is the main employable sector. This has a huge impact on employment. Now there is a clear recovery in it. Because construction work has started on construction sites. Real estate is also gaining momentum with the lease renewal. Although new leases are not happening. The services sector is expected to grow at 0-5 percent in FY 2021.
Reduced layoffs of employees in the IT sector
Companies in this sector have significant capital. They are also not retrenching employees. Banerjee said that although there is not much chance of growth in hospitals. But the crisis has accelerated digital health servicing. Several indicators like GST collection, railway freight, petrol consumption, peak power demand, electronic toll collection have shown early signs of recovery. Although these signs are quite early, there is a lot of positive expectation from them. It can be said that very soon there may be a big recovery in the future.