IMPACT OF LOCKDOWN ON INDUSTRIES
COVID 19 pandemic has kept the world in standstill. Concern around extension of lockdown is also raising..Lockdown during the pandemic has adversely affected the INDUSTRIES as well. Industries contribute almost 20% GDP. 50% of this is contributed by auto industry. Prior to the lockdown too, sales as well as production were down in auto industry.
Major problems faced by industries due to lockdown were:
- Lower production due to lower offtake.
- Unavailability of employees due to COVID 19 fear (This also include migration of guest workers).
- Lack of transportation facility.
- Due to several weeks of lockdown, engines as well as machines faced difficulty in operating/ restarting.
- Occupancy in hospitality industry went down to minimum.
- Piling up of old stocks especially in electronic industry.
According to official data, as per lockdown impact, the Industrial Output Index is down by 34.7%.
- Industrial output shrinked to 16.7% in March due to COVID 19 lockdown.
- Corona effect has has adversely affected profitability of company to extent about 30% of annual profit.
The lockdown by Corona Virus has contracted the output of Eight core industries in April by 38.1%, Government data shows. Steel, coal, cement, crude oil, natural gas, refinery experienced substancial loss of production. Except for fertiliser, all other seven sectors recorded negative growth.
The lockdown impact over Medium, Small and Micre Enterprises (MSMEs) are huge. [Micro enterprise: Annual turnover less than Rs.5 crore, Small enterprise: Annual turnover between Rs.5 crore and Rs.75 crore, Medium enterprise: Annual turnover less than Rs.250 crore].
Many of these enterprises does not have too much cash to wait out the crisis. PM Garib Kalyan Yojana by government focus primarly on MSME sector. RBI has been trying to pump money into MSME sector but has limited impact. Government should also impose tax relief and provide liquidity in rural areas to boost their demand.
Industries will have to take up strategical as well as recovery plans to save sales and services.
THANK YOU
(STAY SAFE)
SOURCES
- Manufacturing today
- Financial Express
- Industrial Automation
- The New Indian Express
–SREENIDHI K