The Indian economy has been experiencing a significant slowdown over the past few quarters. In the third quarter of the current fiscal, the economy grew at a six-year low rate of 4.7 per cent. Further, the new coronavirus epidemic has made the recovery extremely difficult in the near to medium term, according to a FICCI (Federation of Indian Chambers of Commerce and Industry) report released here on the impact of Covid-19 pandemic. 

“The outbreak has presented fresh challenges for the Indian economy now, causing severe disruptive impact on both demand and supply side elements, which have the potential to derail India’s growth story,” the report stated, and added that the impact could be visible on demand, financial market, supply, and international trade. 

Key findings of FICCI’s industry survey to assess impact of Coronavirus

FICCI has attempted to assess the immediate impact of Coronavirus on businesses across the country through conducting interactive sessions and survey amongst the industry members. 

The survey revealed that besides the direct impact on demand and supply of goods and services, businesses are also facing reduced cash flows due to slowing economic activity, which, in turn, is having an impact on all payments, including those for employees, interest, loan repayments and taxes.  

Agriculture and food processing  

The report suggested that the agriculture and allied activities sector is likely to be adversely hit by the Coronavirus scare.

In fact, the poultry sector is already being affected severely. It is the fastest growing sub-sector of the Indian agriculture eco-system and where the country has created a foothold at the global level (India is the third largest producer of eggs and fifth largest producer of broilers). It is already facing losses to the tune of Rs 150-200 crore each day. 

Furthermore, the prices of several commodities, including soybean, maize and chana have fallen. Once the rabi crop will start arriving in the market from the second week of April, mandis are going to see large gatherings of farmers. There is a need to ensure preventive measures to avoid the spread of virus in rural areas.  

Suggestions 

• The government should mount an enthusiastic media campaign to counter the rumours being spread on social media regarding consumption of poultry products

• Government may also consider giving direct assistance to poultry farmers through direct benefit transfer so that they are compensated to some extent for the losses incurred by them

• Given the extensive interactions and concentration of people in agri-mandis, steps must be taken to regulate the entry and exit of people in agriculture mandis 

• Given the good rabi season, the supply of agri products in the markets is expected to be sizeable and the government must ensure that the agri-products are procured and stored well in time. The bhawantar scheme can be used for this purpose more effectively. 

• Payments due to various agencies dealing with Central and State Governments should be released on a priority basis. This will help ensure liquidity in the trading system in rural areas