Economy suffers 'unprecedented collapse' due to COVID-19: Survey

The coronavirus pandemic is having a "deep impact" on Indian businesses and has already caused an unprecedented collapse in economic activities over the last few weeks, says an industry survey released on Tuesday.

The survey, jointly conducted by industry body Ficci and tax consultancy Dhruva Advisors by seeking responses from about 380 companies across sectors, also said that businesses are grappling with "tremendous uncertainty" about their future.

Almost 72 per cent of the respondents said that the present situation is having a "high to very high" level of impact on their business.

Jobs are also at risk over the coming months as nearly three-fourths of the surveyed firms said they may look at some reduction in manpower in their respective companies, the survey noted.

A substantial majority of the respondents do not foresee a positive demand outlook for their business in this fiscal, with 70 per cent of the surveyed firms expecting a degrowth in sales in the fiscal year 2020-21.

Moreover, a vast majority of companies also foresee a reduction in their business cashflows and company's order book.

"The survey clearly highlights that unless a substantive economic package is announced by the government immediately, we could see a permanent impairment of a large section of industry, which may lose the opportunity to come back to life again," Ficci said in a statement.

The industry body further stated that theCOVID-19 pandemic is having a deep impact on the Indian economy and members of Indian industry.

The magnitude and speed of collapse in economic activity that India has seen over the last few weeks is unprecedented and there is tremendous uncertainty about what the future holds for businesses and enterprises, Ficci said.

Sangita Reddy, President, Ficci,said, The Covid-19 pandemic is causing deep economic harm and could reverse the gains made in the industrial economy over many decades. There is a need to render immediate and sizable support to industry to protect people, jobs and enterprises."