Lockdown
Abstract
Indignation caused by COVID-19 was quite common. Everything froze up. The pandemic started and resulted in a complete lockdown. Where every mode or medium was locked at home. Covid cases in India abruptly started increasing and this disrupted the supply and demand chain.
The curb of infection caused the severe condition of health and economy. No covid medicine spiked up because of covid death rates. To foist the spread, countries started encouraging lockdowns. The Lockdown affected transportation, construction and supply chain badly.
The people and businesses started dealing with a myriad of new defiance. The gaps were clearly visible in every sector. Many transportation facilities suspended their services during the lockdown period. The construction and engineering sector faced multiple challenges & insolvencies of credit and capital, frauds, environmental laws and were pressurize working under the norms act of Regulation and Development 2016.
As the clock clicks 2021 enters but the main concern over here is “What we learned from our past”, “How the situation got handled”, “What were the outcome challenges that should be tackled in near future”.
Targeting each sector individually will help to create a better understanding of that particular industry. Along with covering the potential impact of COVID-19 in each industry one by one.
Methodology
This post is prepared to cover the comprehensive yet compact research in-depth analysis of each sector. The discernibly ‘impacts’ and ‘measures and post challenges’ is impactful briefed in this report. The past ongoing situation is clearly described what affected these sectors with a nominal and clear approach of understanding.
Impacts of COVID-19 On Transportation/Construction/Supply Industry
COVID-19 pandemic created a new challenge for the transportation/construction/supply industry, for public transport. Transportation might face financial constraints soon because of safety issues.
Restricted Supply
Limited or restricted supply tampered with all three systems badly. The complete lockdown has restricted a temporarily halt on the production as well as if permitted then have to work with minimum labour. This resulted in a low production rate and somehow deplete a high percentage of transportation.
Stuck in Transit
The other reason that correlates with the shortage of supply is that goods were stuck in transit. Ship, Flights, Railways, Roadways all anchored at the same spot. It was impossible to impose the goods. As an outcome, it was not deliverable to consumers.
Low Demand for Non-Essential Products
Groceries, food & pharmaceuticals skyrocket. Essential items got boom while the non-essential items faced trouble and were stocked up in the storage warehouse for undefined tenure. This tended towards overstocking or overflow non-essential items that were non-deliverable.
Regulation Pass
The transport industry got permission to maintain supply change but faced stringent regulations. The delay in obtaining passes was quite obvious. Strong rules and regulations were imposed to execute freely in-state, cities, and towns. Excessive demand claimed the virtue of the transport industry but a limited workforce makes it only functional.
Shortage of Manpower
Lockdown came with certain rules, if violated may cause a severe increase in covid cases. Thus, the government only permitted the essential workers and other workforce were forced to remain at home. As a result, the transport business got hindered. Businessmen were asked to operate on less or half-human resources. Somehow construction business was still in paused phase, while the transportation got a real 2nd chance after the supply chain management. Logistic services and essential delivery trucks were allowed to roam freely while the construction trucks were questionable.
Mislay Profit of Transportation/Supply/Construction Industry
Economic times says “20-40 lakh people went down to unemployment”, where BOCI claims 20,000 bus operators & 11 lakhs tourist taxis required government support with respect to EMI loans & waiver of taxes that they were facing. The transport industry also demanded the extension of their Insurance policy that somehow turned to be expensive. Earlier it was below 1 lac or somewhere around 1 lakh but now it’s between ₹50,000 to ₹2 lakhs a year. But it didn’t happen the way it supposed to be. Transport industry intervention for the interest in vehicle loans hit harder after September. Where these industry sectors also asked for a nominal waiver of vehicle taxes and concession on fuel as well as the removal of toll taxes for daily commute.
Talking about the construction industry, ₹30,000 crores per day loss was registered. The pandemic also reduced the investment criteria by 25-30% which directly hits the employment and Gross Value Added. As per survey calculation, CREDAI came to know about 20,000 projects were engaged prior to lockdown. These projects were happening on 18,000 different sites and around 30-50% of workers were staying away from the sites due to lockdown. In combination with the total worth of these projects’ workforce were 8-9 million. After the lockdown, these workers expected a raise of 21-25% raise of skilled workers and 10-16% for semi-skilled.
The next thing that came across was ‘delay’. Projects that were under construction hit the marker with red, this additional interest cost on the working capital was borne reverted as a risk-sharing capital investment for contractors and developers. The project dependencies like electronics equipment’s, specialised material and equipment are hit by disrupting supply chain caused by major clauses.
The supply chain in lockdown was severely affected. Indian industries have dependent on Chinese importers. These industries of China were also at high risk. As calculating on numbers, china supplies 70% of pharmaceuticals essential ingredients, 10-30% of automobile base components and raw chemicals, chemicals for textiles, and a lot more. Many micros, small, medium (MSMEs) is dependent on China’s importers. This caused the government to enchant the scheme and slogan of “ATMAYA NIRBHARR BHARAT”. In future, it will reduce the dependency and will be self-relied on local material.
PATH TO RECOVERY
All these three sectors play a catalytic role in the Indian Economy. But the major concern is the role of the ‘recovery rate in India’. The sheer size of the workforce is unemployed this makes the situation critical. Though the government clears the head by announcing the ₹20 lakh crore stimulus package for a poorly hit economy. The state welfare fund released a corpus of 30,000 crores. The Indian banking sector has also declared a reduction in TDS and TCS rates. The government has shown lenient behaviour towards the Construction industry by instructing government agencies like central public works, railways and others to provide an extension of the deadline with no cost to the contractors or builders.
For the transport sector, it is time to rethink with respect to the future. COVID-19 has germinated problems that didn’t take place. This led to a better understanding of the possible outcome of “what can be the better alternative”, “what happens in future if this COVID-19 was gone completely blind”, “how to tackle the hike of fuel prices”. The answer to all these questions is sustainable energy like CNG, png, solar energy. But still what about the loans and credits for small businesses?
The solution to this problem must be answered by the officials. Relieves in taxes and EMI might help small firms to stand back. Not forgetting the supply chain sector, it’s a reminder, alarm or a wake-up- call for India to lose its dependency or reliability on the countries like CHINA. Local manufacturing will definitely enhance the economy and self-building proficiency of India. Though PM Modi has understood and now started encouraging “AATM NIRBHAR BHARATA SCHEME”. But what recedes in the future no one got any clue.
CONCLUSION
As per conclusion, I would recommend the Banking sector to take down their aggressive cuts from small businesses, especially for the pending projects. Creating a new and vital recovery system that must cover situations like this shortly. Government should include the COVID like situation in insurance policies so that an average company get covered by it. Encourage local employees and labour that turn out to be beneficial for these sectors. Beneficial things like human resources, obligations, and supply chain must not get a handicap. The companies must safeguard their alternative material, supply or any other means to skip the hindrance at the time of demand or construction or transportation. A better alternative is the better to keep things running.
