Coronavirus outbreak: A 21-day lockdown may have cost India Rs 8 trillion

The sectors that have been most impacted are transport, hospitality, and real estate

The world’s biggest lockdown that shut a majority of the factories and businesses, suspended flights, stopped trains and restricted movement of vehicles and people, may have cost the Indian economy Rs 7-8 trillion during the 21-day period, analysts and industry bodies said.
 

With the intent to contain the spread of Covid-19, Prime Minister Narendra Modi with effect from March 25 announced a nationwide complete lockdown that brought as much as 70 per cent of economic activity, investment, exports and discretionary consumption to a standstill. Only essential goods and services such as agriculture, mining, utility services, some financial and IT services and public services were allowed to operate.
 

Stating that the pandemic came at the most inopportune time for India whose economy was showing signs of recovery after bold fiscal/monetary measures, Centrum Institutional Research said the country again stares at the possibility of low single-digit growth for FY21 (April 2020 to March 2021).

“Nationwide complete lockdown is likely to shave off at least Rs 7-8 trillion,” it said. Acuite Ratings & Research earlier this month estimated that the lockdown will cost the Indian economy almost $4.64 billion (over Rs 35,000 crore) every day and the entire 21-day lockdown will result in a GDP loss of almost $98 billion (about Rs 7.5 trillion).
 

The rapid spread of Covid-19 has not only disrupted the global economy but also triggered a partial shutdown in many parts of India from early March and an almost complete shutdown from March 25.
 

“While the countrywide shutdown is scheduled to be lifted from April 15, 2020, the risks of prolonged disruption in economic activities exist depending on the intensity of the outbreak,” the credit rating agency said.

The sectors that are most severely impacted are transport, hotel, restaurant, and real estate activities.

Prime Minister Modi is likely to detail the post-lockdown scenario in an address to the nation on Tuesday morning.

All India Motor Transport Congress (AIMTC) Secretary-General Naveen Gupta said the accumulated losses to truckers during the first 15 days of lockdown were about Rs 35,200 crore given an average Rs 2,200 loss to per truck per day.

“More than 90 per cent of the about one crore trucks in the country are off roads during the lockdown as truckers with only essential commodities are on the move,” he said. “Even if the lockdown is lifted, it will take at least two-three months for truckers to limp to some normal scale as we apprehend consumption of non-essential items to remain hit on the account of lack of purchasing power.” AIMTC represents about 9.3 million transporters and truckers and is their umbrella body.
 

National Real Estate Development Council — a body of realtors, puts the loss in the sector at Rs 1 trillion.
 

“I am scared to estimate what the losses would be. I think a potential loss of maybe Rs 1 trillion on a conservative basis on an all-India basis. It is a conservative figure. I cannot think of the upper end of the figure. Based on thumb rule, at least Rs 1 trillion,” said its president Niranjan Hiranandani.
 

The Confederation of All India Traders estimates that the losses incurred by the retail trade of the country in the second half of March due to the Covid-19 pandemic were a massive $30 billion.
 

Vegetables to be sold from 6 am to 11 am in Delhi wholesale mkts
 

The Delhi government will implement odd-even rules in all wholesale markets in the city, under which traders will sell vegetables on alternate days, Development Minister Gopal Rai said on Monday. Speaking to PTI, the minister said that the government has also decided to stagger the timings for the sale of vegetables and fruits in these mandis.
 

“Vegetables will be sold from 6 am to 11 am and fruits from 2 pm to 6 pm in all wholesale markets in Delhi,” he said. The decisions were taken at a high-level meeting chaired by the development minister here. There are five major wholesale vegetable and fruit markets in the national Capital, including the Azadpur mandi, the Ghazipur mandi, and the Okhla mandi. Also, there two wholesale anaj mandis (grain markets) — Najafgarh and Narela.