India Inc expects swifter recovery from second wave of Covid-19 pandemic

Private investments will be better in first half of FY22, according to CII CEOs' poll

Recovery from the second wave of the pandemic in April-May is expected to be swifter as compared to the first wave in 2020, according to the Confederation of Indian Industries (CII) Chief Executive Officers (CEOs) poll of 119 top corporates.

During the second wave, the lockdowns were largely designed to limit social gatherings and impact on economic activities was restricted. This helped arrest the impact of the second wave on economic growth, according to a survey conducted by the industry lobby group Confederation of Indian Industries (CII).

About 59 per cent of the CEOs polled expect the recovery in sales to be better than in the first wave for their companies, while 46 per cent of them expressed a similar trend for their respective industry sectors.

The survey said vaccination holds the key to mitigating the impact of the second wave on economic activity and boosting consumer sentiment. “Assessing the consumer demand for their sectors, 49 per cent of the 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 the first half of the current financial year when compared to the same period in 2019-20,” an official statement said.

It said 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, 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 financial year 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,” CII Director General Chandrajit Banerjee said.

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