A recent survey by CARE Ratings shows that a majority of industry leaders perceive lockdown to be a solution for the raging coronavirus situation across India with a sizeable number expecting it to extend only till May-end.
They also considered the current lockdown to be less stringent that last year. The optimism over India’s vaccination drive seems encouraging. A total of 305 people were interviewed between April 27 to May 11 with respondents ranging from manufacturing, financial services, non-financial services, power and others.
At least 80 percent of the respondents expect consumer demand for non-essentials as well as investment demand to be severely impacted. Almost the same proportion believe non-performing assets (NPA) situation to worsen in coming months.
Almost three-fourth of respondents believe that turnover of non-manufacturing essential segment to be the most impacted followed by non-essential services (47 percent).
The economic recovery is beginning to lose steam with infection rates scaling record highs. Almost 7 out of 10 respondents expect the GDP to be below 9 percent for FY22.
A majority of respondents expect moratorium by the Reserve Bank of India and emergency credit line to be extended by the government as a policy response to ease business conditions.
In addition, release of pending dues from the government and indirect taxes also found mention.
Micro, small and medium enterprises (MSMEs) are faced with issues of labour shortages and escalating uncertainty with a large set of them expecting business performance to worsen.
Overall, said CARE Ratings, the worsening pandemic situation, localised lockdowns and slower-than-expected pace of vaccinations have darkened prospects of a nascent economic recovery and accentuated business uncertainty.
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