Maintaining of the Profitability, Payment of Salaries to Employees, Working Capital are Major Challenges while Businesses are Preparing for Increasing Sales Volumes, Competitiveness and Cost Cuttings said PHDCCI Quick survey on Post lockdown Business Scenario

No.PR-69 May 13, 2020 New Delhi Maintaining of the Profitability, Payment of Salaries to Employees, Working Capital are Major Challenges while Businesses are Preparing for Increasing Sales Volumes, Competitiveness and Cost Cuttings said PHDCCI Quick survey on Post lockdown Business Scenario Industry body, PHD Chamber of Commerce and Industry has conducted a quick pan India survey to assess the impact of pandemic COVID-19 on Indian businesses and their preparedness to face post Lockdown issues and challenges of which 2480 respondents across the country have provided their perception on the current challenges and their preparedness for the post lockdown business operations. According to survey, the key challenges for businesses in the post COVID scenario include maintaining price-cost margins/profitability (61%), payment of wages/salaries to employees (60%), availability of working capital (58%), repayment of loans/payment of EMIs (53%), high costs of capital (52%), availability of finances/loans (51%), costs of social distancing (51%), weakening of demand (51%), compliances of labour laws (50%) and retaining of the full workforce (49%), said Dr D K Aggarwal. The survey also revealed key plans of the businesses in the post COVID scenario such as increasing the sales volume (67%), enhancing competitiveness of business (65%), cost cutting of business operations (64%), enhancing business operations in the domestic market (60%), focus on innovation, research & development (58%), enhancing the price-cost margin (53%), reducing the workforce in business operations (50%), increasing the scale of business operations (44%), diversify business operations (43%) and enhancing business operations in the international market (36%), said Dr Aggarwal Survey was conducted across the micro, small, medium and large enterprises and across the sectors. The announcement of Rs 20 lakh crore stimulus package by the Hon’ble Prime Minister which is 10% of GDP is highly appreciable and encouraging. The phenomenal economic stimulus will refuel economic fundamentals and help to resume the economic activity in the post lockdown will go a long way to convert U-shaped economic recovery into the V-shaped economic recovery, said Dr Aggarwal. The focus on five pillars i.e. Economy, Infrastructure, Tech-driven Systems, Demography and Demand announced by the Hon’ble Prime Minister Modi ji will not only maintain and regain economic momentum, but also help to explore global market opportunities with strengthened global supply chains, said Dr D K Aggarwal. Strengthening of the local supply chains, agriculture and food supply chain will not only fulfil the demand but also strengthen the supply dynamics and create tremendous employment opportunities for growing young workforce particularly in rural areas, said Dr D K Aggarwal. MSMES are the backbone of the economy, great handholding at this difficult time would help them to grow and maintain the employment in their respective factories. The focus on self-reliance will strengthen domestic demand and supply from the indigenous production and create employment opportunities for the work force, said dr. D K Aggarwal. Going ahead, the industry is eager to hear about the structure of Rs 20 lakh crore stimulus package and is extremely enthusiastic to support the Government with its full efforts to regain the higher economic growth trajectory, going forward, said Dr Aggarwal. Significant stimulus package will strengthen the five pillars and would go a long way to achieve USD 5 trillion economy, said Dr Aggarwal. Going ahead, it is suggested that the cost of doing business, including cost of capital, cost of compliances, cost of logistics, cost of land and availability of land, cost of power/ energy and cost of labour, should be reduced in the country to attracts foreign investors and provide boost to the domestic businesses, said Dr Aggarwal. Land reforms such as increase in the lease period and creation of land banks for the use of industry should be focused upon. State should have ready land bank with developed infrastructure, so that the project can be started immediately. In addition, single window service should be strengthened to give clearance for all the permissions in 7 days to ensure faster and efficient action and decision-making, said Dr Aggarwal. India should build domestic capacities to mitigate the impact on import demand and materialize an opportunity to increase presence in global exports. India should target the companies from US, Japan, EU, that desirous of shifting their base and promote Make in India. This will help the country to become the manufacturing hub of global supply chains and global export powerhouse in the coming times, said Dr Aggarwal. These reform measures would go a long way to help trade and industry to resume business activity in this extremely difficult time, said Dr Aggarwal. Survey report attached Ends. Media Division PHD Chamber of Commerce and Industry