Second Wave Impacted 58% of India COS: FICCI

The second wave of Covid-19 and resultant lock downs in several states significantly impacted about 58% of Indian companies but India In-cremains optimistic about a strong recovery in the coming months, a private industry survey has said.

About 58% of respondents cited weak demand as a major challenge in the current environment, the survey conducted this months by Federation of Indian Chambers of Commerce and Industry (FICCI) and Dhruva Advisors showed.

While urban demand saw a sharp hit, 37% of firms reported a high impact on sales in rural markets as well, FICCI said in a statement on Monday.

Another industry association,PHD Chamber of commerce and Industry has urged the government to boost infrastructure spending to support economic recovery and help boost demand.

To refuel aggregate demand, the government should front load expenditure under the national infrastructure pipeline, PHDCCI president Sanjay Aggarwal said in a statement on Monday.

As per the FICCI survey, about 56% respondents also cited managing costs as a key challenge for businesses.

Yet, most companies are confident about a speedy recovery.

“With the number of new cases ebbing and states getting into the ‘unlock’ mode, there is hope that business and economic activities would regain normalcy in the months ahead,” said Shankar, president of FICCI

Nearly 63% of  survey respondents expect capacity utilization to improve to over 70% in the coming six months to a year. As of now, 40 % of companies reported utilization rates of  less than 50% of installed capacity.

According to the survey, the government top priority to prepare for a third wave of the pandemic should be ramping up investments in health care infrastructure in tier two and tier three cities and in rural areas.

To scale up Covid-19 vaccination, the government should set up a national facility for vaccine manufacturing with government funding, apart from creating more booths at public places, setting up facilities in cooperative societies, and promoting with corporate, and FICCI said. S-ET

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