Business

Over half of India Inc. catches a cold

Many companies see huge reduction in orders, cash flows, says FICCI survey

Over 50% of Indian businesses are seeing marked impact on their operations due to the COVID-19 pandemic, while about 45% companies believe that it could take at least six months for the situation to come under control, according to a study by the Federation of Indian Chambers of Commerce and Industry (FICCI).

“A significant 53% of Indian businesses indicate the marked impact of the coronavirus pandemic on business operations even at early stages,” the survey, which saw participation from 317 companies between March 15-19, 2020, said. Almost three-fourth of the businesses indicated big reductions in orders. “Of these, almost 50% indicated a 20% and more decrease in the orders,” it said.

Likewise, almost 80% of companies reported a decrease in cash flow, with more than 40% respondents reporting a fall of 20% or more in cash flows. Asked about the expected time for normalcy to return, 45.21% respondents said it would take six months, while 42.47% expected it in three months. The survey added that nearly 30% organisations have put in place work-from-home policies for their employees.

However, it added that for some sectors, including manufacturing units, banking and IT, the work-from-home proposition is posing implementation challenges. “A combination of monetary, fiscal and financial market measures is needed to help the businesses and people cope with the crisis,” it said.

Among other things, it suggested that the cost of funds be brought down through reduction in policy rates, increase credit limits for all regular banking accounts by 25% across the board and bring in flexibility in the banking system to reschedule payment terms without the need for provisioning. It added that the government should not pare down its capital spending plans despite any shortfall in tax collections.

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Printable version | Mar 30, 2020 1:06:28 PM | https://www.thehindu.com/business/over-half-of-india-inc-catches-a-cold/article31122252.ece

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