An "integrated effort" with help of the RBI's monetary policy and the government's fiscal policy coupled with a close coordination of the Centre and states is needed to "put things on track and restore normalcy" as soon as possible, according to JK Organisation Director Harsh Pati Singhania.
Stating that the recovery process would start from the front end with the consumers start purchasing, Singhania urged the government to help the people bring their confidence back with more direct cash transfers and other measures to help the industry pay wages.
"It has to be an integrated effort which would be done with help of monetary policy of RBI, the fiscal policy of the government coupled with a close coordination of the centre and state in a federal structure which help put things back to on track and restore normalcy at soon as possible in these unprecedented times," Singhania, director of JK Organisation, told PTI.
Over the measures announced by the Reserve Bank of India (RBI) on Friday, Singhania said it could also have helped the industry particularly micro, small and medium enterprises (MSMEs) with easy and low interest loans as it was linked to the livelihood of several people.
"It's not only about restarting production and business but it's also about restoring the livelihood of people. Without adequate earnings and availability of cash in hand, there would be no demand and consumption; in the absence of which the economy would not take off or be stable," he said.
Over the impact on the indian industry, he said that definitely the April-June quarter has been impacted and the July-September quarter may also be affected. According to him, it would be different from sector to sector as some would recover faster but there would be some, like the service sector, which would take longer time to comeback.
"But, it's quite clear that if you look at Q1/FY21, there would certainly be an impact because of lockdown, activity is affected in April. Even in May, they will pick up gradually. Definitely, Q1 (first quarter of the current financial year) is going to be affected. I think that Q2 may also be affected as some businesses would have a deeper impact or a continued impact and some businesses may be able to get to a quicker recovery. But, I do not know whether any business will be back to almost normal in Q2," he added.
On being asked as to whether it would impact the entire first half (April-September) of the ongoing fiscal, Singhnia said: "Yes, because there would be a gradual opening of the economy. It's not the matter of manufacturing units starting up or a company starting up. The entire ecosystem has to function at the same level as dealers, distributors and the demand by the consumers.
"They (consumers) would have to buy at the same level before the shutdown happened," he said adding that "there would be disturbance. Obviously, Q1 would be more severe than Q2, in which the business would start coming back depending on the nature".
Though the government is asking the industry to pay the wage of the employees, it should also compensate some part of that.
"All the economies in the world are doing this and we would have to resort to this, otherwise the economic impact would be so enormous and very difficult. It's not only the business, it's matter of job and livelihood," he said adding that the "lockdown was absolutely necessary but now we have to get back to track".
JK Organisation is a USD 4-billion Indian manufacturing conglomerate with 47 manufacturing facilities of products like tyre, paper, cement, auto components, dairy, and agriculture products.
The company has already re-started production in some units where it has received approvals from the authorities, he said.
Last week, Prime Minister Narendra Modi announced the extension of the lockdown till May 3.
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