The nationwide lockdown has had deep ramifications on economic activity and according to a CEO Snap Poll by the Confederation of Indian Industry (CII), 44.7% of the corporate chiefs believe that it would take more than a year for the Indian economy to recover.
According to the snap poll on the 'Impact of COVID-19 on Economy and Industry', as a majority of the firms continue to anticipate a significant decline in their revenues, they now foresee a delay in economic revival and demand recovery.
"The survey results reveal that the country may experience a protracted slowdown in economic activity as a major proportion of the respondents, around 45 per cent feel it will take more than a year to achieve economic normalcy once the lockdown ends," a CII statement said.
Around 36.5% of the corporate bosses feel that economic recovery of the country may be achieved in 6-12 months. Around 17% of the respondents were of the view that recovery would be achieved in 3-6 months, followed by 1.8% who felt that it would require a three-month period.
With respect to their own companies, the respondents anticipate a slightly quicker recovery, with 34% of the respondents indicating a 6-12 month period for recovery of their companies, the survey showed.
Further, a major proportion of the respondents anticipate normalcy in domestic demand conditions within 6-12 months, post lockdown.
The survey saw the participation of more than 300 CEOs, of which nearly two-thirds belonged to MSMEs.
"The lockdown brought economic activity to a grinding halt and the survey findings indicate that a significant majority of the firms (65 per cent) expect revenues to fall more than 40 per cent in the current quarter (Apr-Jun 2020)," it said.
For financial year 2020-21, the expectations of a fall in revenue are staggered, with 33 per cent of the firms anticipating a revenue fall of more than 40%, closely followed by 32% of firms expecting a revenue contraction ranging between 20-40%.
The survey revealed that while three out of four firms have identified that a complete shutdown of operations was a major constraint being faced by businesses, more than half of them have also indicated lack of demand for products as a hindrance to business activity.
On the jobs and livelihood front, more than half of the firms, around 54% foresee job losses in their respective sectors after the lockdown ends. A major share of respondents, 45% of them expect 15-30% cut in jobs.
However, allaying some concerns, nearly two-thirds of the respondents reported that they have not experienced a salary or wage cut in their firms so far. Among those who have witnessed a wage cut, the duration of the same is 'undecided' for a majority, showed the poll.
Chandrajit Banerjee, Director General, CII said: "While the lockdown was necessary to mitigate the impact of coronavirus on the population, it has had dire implications for economic activity. At this hour, the industry awaits a stimulus package for economic revival and livelihood sustenance besides calibrated exit from the lockdown."