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Coronavirus impact: CEOs fear job losses, fall in revenue, profit, reveals CII snap poll

Expectations of a sharp decline in both revenue and profit growth by domestic firms could foretell significant impact of this outbreak on the country's GDP

twitter-logo Joe C Mathew   New Delhi     Last Updated: April 15, 2020  | 15:42 IST
Coronavirus impact: CEOs fear job losses, fall in revenue, profit, reveals CII snap poll
More than 40 per cent firms expect their stocks to last beyond a month once the lockdown ends

KEY HIGHLIGHTS

  • Lockdown could have deeper impact
  • 52 per cent respondents foresee job losses
  • Revenue may fall over 10 per cent
  • Profits may dip over 5 per cent in H1-FY21
  • 40 per cent firms expect their stocks to last beyond a month
A snap poll conducted by apex industry chamber Confederation of Indian Industry (CII) on 200 chief executives across sectors found majority of them fearing their revenues would fall more than 10 per cent and profits dip by over 5 per cent during the first six months of the current year 2020-21. While 80 per cent claimed their inventory was lying idle, 52 per cent are foreseeing job losses in their respective sectors, resulting from the impact of the COVID-19 outbreak and the ensuing 21-day lockdown.

The CII CEOs Snap Poll on Impact of COVID-19 Lockdown on Industry was conducted electronically and had a cross-country participation. The expectations of a sharp decline in both revenue and profit growth by domestic firms could foretell the significant impact of this outbreak on the country's GDP (Gross Domestic Product) growth.

Also read: Coronavirus: Does smoking, chewing tobacco increase chance of getting infected?

"The government could announce a fiscal stimulus package for the industry and implement it on fast-track mode, given the sudden imposition of the lockdown has significantly impacted industry operations and the uncertainty of a recovery threatens substantial loss of livelihoods going forward," stated Chandrajit Banerjee, Director General, CII.

Incidentally, more than 40 per cent firms expect their stocks to last beyond a month once the lockdown ends -- indicating the companies' expectations of a demand slowdown in the post-lockdown period.

On the jobs front, about 52 per cent firms foresee job losses in their respective sectors due to the impact of COVID-19 pandemic and the country-wide lockdown. While the proportion of jobs that are expected to be cut are quite staggered, significant proportion of the firms (47 per cent) expect less than 15 per cent job losses, while 32 per cent firms expect to shed about 15-30 per cent jobs once the lockdown ends.

Even the respondents engaged in production of essential products and supply of ancillary goods talked about constrained operations in production and supply of necessary goods and services. Firms have revealed that access to manpower and movement of products have emerged as major constraints in essentials trade -- be it manufacturing or warehousing and transport or retail sales of these essential commodities. While the central government has allowed manufacturing, transportation and distribution of essentials, the local level enforcement has implemented the lockdown measures on essential commodities as well as services, the survey revealed.

Also read: Coronavirus pandemic: India faces 'greatest emergency' since Independence, says Raghuram Rajan

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