Jul 14, 20212 min read

Swifter economic recovery expected post second wave of Covid-19, says CII poll

India's economy is expected to see a quicker recovery from the impact of the second wave of pandemic as the coronavirus-induced lockdowns in the country were largely designed to curtail social gatherings and did not affect the economic activities much, as per a survey by the Confederation of Indian Industry (CII).

CII carried out polls with 119 top CEOs of the country. About 59 per cent of the CEOs participating in the survey expect the recovery in sales for their firms to be better than in the first wave, while 46 per cent of them expressed a similar trend for their respective industry sectors, says CII.

Director General of CII Chandrajit Banerjee said, “The deadly second wave has not affected much of the economic activities as the lockdowns were largely designed to limit social gathering and this has helped limit the impact of second wave on economic growth when compared to the first wave.”

Vaccination holds the key to mitigating the impact of the second wave of pandemic on economic activities and boosting consumer sentiment.

Encouragingly, Indian businesses are making concerted efforts to vaccinate their employees, as reflected by the poll results which reveal that 55 per cent of employees of the polled firms have been vaccinated with at least the first dose of the Covid-19 vaccine.

Assessing the consumer demand for their sectors, 49 per cent of the polled CEOs expect consumer demand to be better in the first half of 2021-22 when compared to the same period in 2019-20. Similarly, 72 per cent of the CEOs expect private investments to be better in first half of the current fiscal year when compared to the same period in 2019-20.

As many as 62 per cent of the corporate leaders confirmed that their firm was compelled to scale back operations during the second wave. Due to the scaling back of operations, the adverse impact on the profitability parameters of the firms is apparent too.

The poll results show that 44 per cent and 39 per cent of the CEOs expect the dent on their revenue and net profit growth respectively to be more than 10 per cent in the first half of the current fiscal as compared to the same period in 2019-20.

“The good news, which got further attestation from the poll results, is that the external demand has remained supportive, with 81 per cent of the respondents expecting that the second wave in India will not have adverse impact on the exports for their sector in the first half of the current year than the comparable period in 2019-20”, says CII DG Chandrajit Banerjee.

The buoyant external demand is buttressed by large-scale global stimulus and the fast pace of vaccination coverage across key global economies.

In addition to a favorable external environment, some encouraging news is also forthcoming from the employment scenario.

Localised containment measures during the second wave had a limited impact on stalling the economic activities fully, portending favorably for the employment situation. Not surprisingly, an overwhelming 83 per cent of the CEOs polled foresee either an increase in hires or maintenance of status-quo on the hiring front.