Second Wave of COVID19 & The Indian Industry /Economic Scenario

Indian Industry in Covid Scenario

Despite being battered by the National Lockdown last year and continuing lockdowns in many areas, many key sectors had bounced back and were struggling to cope with the pent up demand that had been unleashed. Things were looking good- the pandemic had eased considering with daily cases at a fraction of their peak levels and a nationwide vaccination drive in full earnest. The nightmare, 2020 , was fading in the rear view mirror. The second wave of the COVID pandemic , however, is threatening to bring that recovery to a grinding halt. Let us have a look at how four key sectors — auto, pharmaceuticals , consumer durables and aviation — are fairing as the country records over 350000 cases a day.

AUTO — Business in Q4 will be stellar but the lockdown in Maharashtra ,which accounts for 12% of the country’s total market , will bite..

For now , companies are managing the situation , with no visible signs of labour shortage.

Production will be impacted –Tata Motors ,Mahindra and Bajaj Auto have been asked by the Government to operate at 50% of their capacities. Companies are working with Vendors to ensure uninterrupted supply of parts .Dealers are shut, crippling the capacities.

Consumer Durables : Since Diwali , business has been good. ACs, fans and refrigerators have seen the most sales. The lockdown in Maharashtra and the partial ones in other states have not had an impact as e-commerce is still operational in most of the states.

Production continues at peak capacity , as the major hubs are in Gujarat and the National Capital Region. E-commerce is helping maintain stability ,even though in Maharashtra , only essentials can be delivered home.

Pharmaceuticals : Big companies selling medications for chronic ailments are doing well. The non-Covid segment had begun to recover but this recovery may now be disrupted by the Second Wave as the hospitals and the overall healthcare infrastructure focus on dealing with the pandemic.

After a brief disruption last year , production has recovered. Even the latest lockdowns have not impacted production. Raw materials , mostly imported from China , now have alternative sources but vaccine suppliers remain a concern, as manufacturers are willing to scale up. The shortage of Remdesiver ,used in the treatment of Covid, continues, even though companies have promised to increase production.

Aviation : Unless the spread of the virus is arrested quickly , passenger traffic during the otherwise peak summer season is set to take a big hit.

Many who had lost jobs were hoping to get back to work amid signs of an economic recovery . Pilots and crew members were also called back from leaves. This has now slowed down.

Airports will also be badly badly hit. Anecdotal evidence indicates footfalls have fallen dramatically in April at many key airports.

The Centre is examining proposals to extend compliance themselves for Income Tax and GST to provide further reliefs. to businesses during the second COVID19 wave.

The Government has received several industry representations , including from MSME’s seeking an extension of various reliefs upto at least 3 Months.