An invisible enemy has caused enormous grief in terms of lives, hit us all with an economic catastrophe impacting livelihoods and at the same time has forced ‘change’ and ‘transformation’ in many ways. Indeed, the COVID-19 pandemic and its economic and social impacts have disrupted nearly all aspects of life for everyone in the society and businesses of all shapes and sizes.
The Covid-19 crisis has affected data collection activities of national statistical systems around the world including in India. Beyond that, given the uncertainties and a large number of moving pieces, deciphering key trends on growth, inflation, employment or inequality and using them for policy inputs has become difficult after Covid. To avoid exacerbating the impact of the crisis and in building societal resilience, governments need to gain meaningful cues from data so as to design inclusive and fair recovery measures that leave no one behind. Sometimes, headline data can also mask economic weaknesses in specific areas. With this as the backdrop, the role of surveys has assumed more importance now than before.
The Bombay Chamber of Commerce and Industry (BCCI) conducts Economic Outlook Survey periodically to solicit inputs from member companies on business challenges faced, access to funding and macroeconomic policies. This edition of the Outlook Survey has an additional focus on COVID-19 and also tends to highlight some comparatives with previous surveys to gauge the damage. The previous survey was conducted and submitted to the RBI in July 2020.
Based on survey findings from Bombay Chamber’s membership 121 organisations from 11 sectors, this policy brief outlines some interesting facets such as resilience of businesses on one side and some common business concerns on the other. This survey highlights some challenges of doing business as also highlights the disadvantages from high costs of doing business in India. The same provides inputs for regulatory review and can also form critical inputs for the State and Central Government and also the RBI for corrective actions.
To begin with, the impact of the 2nd wave on economic activity has not been as severe as was seen during the 1st wave. While confidence level has dropped after the 2nd wave, a majority of the respondents do believe that top line growth will be positive in FY 22. In addition, some rationalisation in the behaviour of economic agents is expected with respondents asserting that they will again resort to cost cutting in FY22 to manage the P&L pressure but they expect this pressure to be limited.
Furthermore, last mile credit availability is an area that needs to be looked into as over half of the respondents said that they are not sure whether the recent measures announced by the RBI for credit flows to SMEs/MSMES/MFIs are adequate.
In conclusion, this survey highlights the way in which Covid-19 is changing business behaviours and while exposing vulnerabilities is also probably helping businesses to adapt to sudden and unforeseen shocks and thus build resilience.
