Even as manufacturers chart out plans to reopen factories post COVID-19 lockdown, the pace of recovery would be quite slow in the face of multiple challenges including disrupted supply chain, low demand and fear of the crisis stretching. Noting that restarting plants itself would be a challenge given that equipments are not being maintained and could rust, DCM Shriram Chairman & Senior Managing Director Ajay S Shriram said that companies would have to deal with the issues of cash flow and debt repayment.
He underscored the need for extending financial support to firms across the board, regardless of their sizes, as it will help bring the economy to stable footing sooner than later. He cautioned that banks may get into trouble if they do not help the business enterprises."Banks also know that if they don't support the people who borrowed money they will get into more financial problems. I think it is in everyone's interest to be open and look for solutions rather than get tied down by processes only. Objective must be clear that MSMEs or large enterprises must start again whenever it is possible. Little ups and downs are part of the road. Help must be given so that the industry comes back at the earliest and the economy of India comes back to a stable footing," Shriram told BusinessToday.In.
In its bid to contain the spread of the deadly coronavirus, the government on March 24 ordered a complete 21-day lockdown from midnight, bringing all economic activities to a complete halt. The move was necessitated as the country saw dozens of cases and several casualties. The fast spread of the virus in Europe and the US has played havoc, with both confirmed cases and toll rising almost on an hourly basis.The total confirmed cases in India reached 2,301 and the death toll was 56 as on April 3, 9am.
With economic activities virtually stopped, business and industry have been suffering huge losses. The government and RBI have come out with several emergency relief measures to support the industry by ensuring liquidity and easing debt repayment. The Centre has also announced cash support and guaranteed ration for the vulnerable section of the society.
While the relief has been extended to trade and business across the board, many sectors such as aviation, travel, hospitality and MSMEs expect targeted support. "I would feel that an approach should be taken to help everyone. Maybe 10 per cent of them don't need help but it does not matter. In trying to select the 90 per cent you could leave out 25-30 per cent of those who would also need it. Give it to everyone just now because ultimately it will eventually come back in the economy," DCM's Shriram said.