Day-to-day business has been greatly affected by the lockdown due to the spread of coronavirus. What is your assessment of the impact on the business activities in the State?
The impact of lockdown due to COVID 19 is short term and long term depending upon the nature of various business activities. The worst affected segment in this critical crisis is undoubtedly Micro,Small & Medium Enterprises (MSMEs). With almost nil revenue due to standstill operations and fixed overhead cost, the MSMEs are finding it extremely difficult to cope up with such precarious situation. There is apprehension that a good number of MSMEs in some sectors shall be completely wiped off. Besides, the impact shall also be felt in form of job loss. The cascading effect on the economy shall be really serious having recessionary trend.
What is the estimated loss during the over monthlong lockdown in the State?
The estimation of loss perhaps cannot be confined to one month only. It shall take a few months for the revival of the economic activities subject to the situation not going further beyond control. However, based on the information available from the various businesses including industries, trade and service sector, the loss can be estimated to the tune of 5000 crores of rupees approximately. Out of this, tea & hotel industries’ loss is estimated to be Rs 1800 crore. Remaining loss is spread over other sectors.
Which sectors of business activity in the State have been most affected?
The main affected business sectors are like tea industry, tourism, hospitality, logistic, real estate, construction, automobiles, entertainment, retail, steel & building materials, handloom & handicrafts, livestock, MSMEs, etc. Agriculture related business activities have also been affected due to transportation and distribution constraints.
The government is expected to open the lockdown in a phased manner. In your view how should the Govt proceed to ease the lockdown restrictions?
The government has already initiated steps to open the lockdown in a phased manner. The strategic steps taken by the government to ease the restrictions is praiseworthy. However, looking at the satisfactory level achieved in containing the virus disease and unaffected rural areas, the government should take faster steps to remove restrictions in rural areas. This will have a positive impact on the economy. Besides, the government should also expedite relaxing lockdown restrictions in urban areas and towns so that business activities could be revived faster.
Is the government discussing with business leaders and trade bodies how the lockdown restrictions can be lifted?
Government was supposed to have Webinar with trade & industry associations few days back. But as per my understanding, the same could not happen.
The State government as part of its austerity measures has suspended all exemptions, subsidies and incentives to industries alongwith GST reimbursement. Your take on the development?
This is really a bolt from the blue to the industries. Besides, refund of GST amount is also suspended. Industry is already adversely affected by lockdown due to spread of COVID-19. Financials have gone haywire. Industry is very perplexed as to how to make payment of salaries to its employees and workers since the operations have come to a standstill. The industry was expecting to get a package of reliefs from the government just to survive in this critial situation. So suspension of all exemptions, incentives and subsidies at this juncture was totally unwarranted as the implications would be very serious. Besides, suspension of refund of GST is further detrimental as the amount was part of working capital funds. Industry as such was suffering because of delay in refund of GST amount. It shall now aggravate the situation. The financial condition of micro and small industries shall be very badly hit. It will not be possible for them to survive and revive. Lastly, the development of new industries is going to be a big question mark.
Some fiscal measures were announced by RBI to be extended by banks/ FIs to support liquidity of businesses. How will the same help in real sense .
The fiscal measures like moratorium on EMIs and deferment of interest in CC account have been announced by RBI to be extended by banks/ FIs. This will help businesses to some extent. The situation will vary from business to business considering the burden of fixed costs and loss of revenues. It has come to our knowledge that banks are going to charge interest on the deferred amount of interest in the CC account which is a big pain point. RBI is yet to announce further package of fiscal measures to support the liquidity in businesses. More the delay, more the harm.
What about stocks in the market ? Is there enough stocks available to meet the demand as inter state movement has been stopped and factories have been closed ?
Stocks in the market comprises of both essential and non-essential goods. Since the inter-state movement of essential goods was allowed by government well in time, enough stock is available. Industries engaged in the production of essential goods like food items, medical items are running smoothly. As regards non-essential goods, situation has started improving in a gradual manner. It will take time for 100 per cent improvement as transportation of goods from the States having more number of Red Zones is a big challenge.
Will the lockdown experience help us in being self reliant ? Will it give an impetus to production of certain essential items locally in coming days ?
Economy of our State is consumption oriented. However there are good number of industries producing essential items like different types of food products. But other essential non-food industries like healthcare equipments, hygiene products, kitchen essentials and related products shall get impetus to be developed locally.
The business community in Assam has been used to prolonged bandhs earlier. Is this experience helping them now to be resilient to face the present situation ?
Both the experiences are different in nature. During bandhs there used to be temporary disruption of business activities. But now during the present situation, the business activities have come to a grinding halt. Moreover , there is no clear visibility on relaxation of 100 per cent lockdown restrictions since remedy for COVID 19 is yet to be found out.
How do you view the increasing role of digital platform in trade and industry because of COVID19?
We all believe that constraints always bring opportunities. The indication is quite clear that post COVID-19/ lockdown life is going to be very different as compared to pre COVID19. Social distancing is now main mantra in all walks of life. The change will be visible, be it office or be it market place. People will like to avoid sitting in close office space, visiting shops for buying , meeting clients and so on. The very fear of getting infected will be big stumbling block and as such social distancing shall have to be maintained as part of safety. Since life has to go on and businesses must run, so here lies the important role of digital platform. It has already started making its inroads. During the lockdown period , business enterprises have started connecting with all types of its stakeholders through various digital tools of the digital technologies. We are frequently hearing about Webinars (seminars through Web) etc.