IMPACT OF COVID-19 IN INDIA AMONG VARIOUS SECTORS – Part I
The impact of COVID-19 in India among various sectors have affected badly, so everyone knows that we are facing a bad situation, not only us, many kinds of sectors have also been affected by this pandemic. There are sectors like the textile industry, automobile industry, tourism, real estate, sports, economy, and education.
So first is the textile industry, being one of the oldest established industries is the textile industry. The onset of the COVID-19 pandemic has severely damaged the India export market. The nationwide lockdown has led to a closure of factories and layoffs have already begun among low wage workers. The pandemic has affected the majority of the Indian export market together constitutes for 60%of the causing order cancellations. Due to the same, India’s apparel industry stands to lose shipments worth more than $3billion as of the moment. In March 2020, exports fell 32.2% compared with the same period last year. Apparel exports, which were about $16.5 billion in 2018-2019, fell almost 4% to $15.4 billion with the march exports alone dropping almost 35% compared with the same month last year. The potential loss in revenues is estimated to amount to the US $8-10 billion.
To support the sector, the government should extend tax compliances, interest rate reductions, and announce special packages to mitigate the crisis faced by the capital and labour-intensive industry. The banking industry should support exporters by relaxing and extending credit payment schedules. Additional financing at low rates should be provided in order to procure raw materials
So the next one is for the automobile industry, auto companies have come under tremendous pressure due to the COVID-19 outbreak that has led to the shutting down of production and closure dealers due to lockdown. Each segment of the auto industry got impacted due to COVID-19.
So first is commercial vehicles has plummeted around 90% for all manufactures, this time the segment was already under tremendous pressure due to the factors such as overall economic slowdown liquidity crunch and non- availability of retail finance which has led to a significant decline in the segment.
Company-wise TVS Motors, Ashok Leyland, Volvo Eicher, M&M witnessed a decline of 90%(YOY) in the year 2020. The car segment also witnessed a significant decline as no production no sales have led to a huge demand contraction.
Marti Suzuki declined 45%, M&M – 88%, Tata motors-68%. In the two-wheeler segment, the situation is similar as well Hero motors has a sharp decline of 42.4%, Eicher decline to 41.1%. In three-wheelers, M&M has declined to 93.9%, TVS motors to 25.5%. Tractors sales escorts decline to 54.3%, M&M – 31% volume.
M&M management has indicated that the central government has taken timely initiative for the farming community, specific relief packages and they hope this will bring in the movement in the tractor sales going forward after COVID-19. The export number was also weak for the month of march 2020 and part from Eicher motors all have reported a double-digit in decline.
Tata and M&M maximum decline 68.2%, MS & Escorts also 55%, it would be challenging as the demand may not pick up early especially demand is directly correlated with the economic activity. Passenger vehicles and two-wheeler segment can witness recovery after the lockdown is over, all people may prefer normal transport to public transport right after the lockdown gets over.
The next is the tourism in the COVID-19 pandemic has had a significant impact on the tourism industry due to the resulting travel restrictions as well as a slump in demand among travellers. The united nation world tourism organization estimated that global international tourist arrivals might decrease by 20–30% in 2020, leading to a potential loss of US$30–50 billion. In many of the world’s cities, planned travel went down by 80–90%.
Many tourist attractions around the world, such as museums, amusement parks and sports venues, are closed. In the calendar 2020 as a fall out of the shutdown of hotels and suspension in flight operations after the onset and spread of coronavirus. The impact on tourism at about 50% during January & February while it may be higher at 70% in march .during April- June, the Indian tourism industry is excepted to book a revenue loss of Rs 69400 cr denoting a YOY loss of 30%. Given various travel restrictions imposed by the Indian government as well as governments across the globe, forward bookings for various conferences &leisure travel bookings to foreign destinations have already been cancelled.
2. Ashritha M
Rajalakshmi School of Business, Chennai