‘About $250 billion lost so far, post economic shutdown’
Non-essentials to see deep compression
- Most businesses in non-essential products and services will have to resort to scaling down of operations in the range of 25-75% in the wake of the COVID-19 pandemic and the resultant lockdown.
- The compression will lead to the loss of millions of jobs across segments in the country by the end of May, although data as of now is ‘the most fragile factor’.
- Businesses will embark on stringent austerity measures as reducing people and minimizing the use of real estate will be critical in this regard.
- All non-essential, luxury, high-end, lifestyle products and devices will be impacted at least for a year. These include luxury cars, superbikes, lifestyle accessories, leisure holidays, premium clothing, and high-end mobile phones.
- The automobile industry is the largest employer in the country and currently provides 38 million jobs. It accounts for 49% of the country’s manufacturing GDP of which the auto component industry has a share of 25%.
- India, as a country, has lost straight $250 billion after a month-long economic shutdown. We are staring at a flat or negative economy.
- Demand compression has led to serious cash flow issues. Our SME sector employs 107 million people. Unless the govt. provides a cash flow relief, pretty soon, things are going to be ugly.