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Business News/ News / India/  India Inc hopes to get back to business in six months
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India Inc hopes to get back to business in six months

In the first phase beginning 8 June, hospitality services will reopen, along with malls and places of worship

Manufacturing sector may gain significantly from the reopening.Premium
Manufacturing sector may gain significantly from the reopening.

Companies in India will need at least three to six months to return to pre-covid levels of business activity, industry executives said, as weak demand, scarce labour, and differing local rules cast a cloud over the reopening of the economy.

The Union government on Saturday announced a phase-wise lifting of the lockdown that began on 25 March. In the first phase beginning 8 June, hotels, restaurants and hospitality services will reopen, along with shopping malls and places of worship. Mint reported on 30 May that Maharashtra, which has the highest number of covid-19 cases in the country, will allow only essential and non-essential goods and service providers to reopen for now, while shopping complexes and malls may have to wait. On Sunday, the Maharashtra government announced it would implement the Centre’s guidelines in easing the lockdown, except in containment zones.

The state has over a thousand containment zones, primarily in the Mumbai Metropolitan Region (MMR). From 3 June, most activities can restart, provided social distancing and hygiene norms are practised, even as the state is effectively under lockdown through the month.

The Retailers Association of India (RAI) welcomed the lifting of the lockdown, and reopening of malls and other retail categories. “The biggest problem for us is the different rules for operation that are expected in not just between states but also at a local district, taluka or ward level," said Kumar Rajagopalan, chief executive of RAI. “Some places have odd-even rules for opening stores, others have restricted timings. Some local bodies say not more than five customers are allowed at one point in time, others say you cannot switch on air conditioning; even though it’s the middle of summer. We’ve been working with local governments to address these. They need to realise that if retail doesn’t work, industries get affected," he added.

The manufacturing industry, among the worst-hit by the lockdown, is expected to gain significantly from the reopening, but a full resumption of operations may take time.

“In the auto industry, the easing will allow dealerships to open up in some areas and also help suppliers. Production, though, will depend on the demand in the market," said Vikram Kirloskar, vice-chairman, Toyota Kirloskar Motors Ltd and president of the Confederation of Indian Industry.

“Demand is slowly picking up as construction activity is resuming," said Deependra Kashiva, executive director, Sponge Iron Manufacturers Association. “But it will take at least another six months to return to pre-lockdown operating levels of 70-75% capacity. When the monsoon sets in, construction will slow down again and demand will be affected a second time. We’re happy to see 60-80% of units in Chhattisgarh, West Bengal and Odisha have started operations. Units in Maharashtra and Gujarat, which employed a lot of migrant labour from the central and eastern states, will find it more difficult. There is no clear visibility of demand."

Sandeep Sahni, CEO, Patel Infrastructure, a road construction firm, said: “We’re studying the modalities for operations in different states." The company has sites in Tamil Nadu, Gujarat, Rajasthan and Punjab. “We’re seeing if we can move workers between our different sites because there is a shortage of labour. We’re operating at 25-30% of capacity. it will take another 2-3 months to return to pre-lockdown levels."

Malyaban Ghosh contributed to the story.

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Published: 01 Jun 2020, 12:27 AM IST
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