Despite macroeconcomic indicators such as GST collection, railway freight traffic, peak power demand, electronic toll collection, etc pointing towards a V-shaped recovery in the economy post the un-lockdown, repeated interventions by local authorities have resulted in corporates being “unable to plan beyond a horizon of a few weeks, affecting all operations”. This has resulted in a stunted recovery with numbers of these indicators being lower than the pre-Covid levels.
“In order to nurture the nascent signs of recovery, it is important to mitigate the uncertainties that are currently prevailing regarding the restrictions. Corporates are unable to plan beyond a horizon of a few weeks, affecting all operations”, said Chandrajit Banerjee, director general, CII. The patchy nature of the recovery is also evident from the sluggishness in hiring activity after the lifting of lockdown restrictions. As per Naukri JobSpeak Index, a monthly index for hiring activity based on the job listings on Naukri.com, a month-on-month improvement was seen in hiring activity, rising 33 per cent in June (sequential improvement over May), even as it remained 44 per cent lower than the same period last year.
The decline in hiring activity was highest for Mumbai and Delhi at 56 per cent and 54 per cent, respectively. Other cities fared slightly better with 52 per cent decline in Chennai, 46 per cent in Bengaluru, 45 per cent in Hyderabad, 44 per cent in Kolkata and 42 per cent in Pune. The railway freight traffic reported a recovery in May and June to 82.6 million tonnes and 93.6 million tonnes, respectively, from 65.4 million tonnes in April — lower than 110.6 million tonnes in January.
Contrarily, as per CII, the rural sector has witnessed faster recovery. The trade body pointed out that while a normal monsoon, healthy sowing and a slew of government schemes have supported the rural economy, interventions by central and state governments to ensure that the lockdowns do not affect rabi harvest in March and April and the sowing of kharif crop in June, has led to expectations of a bumper agriculture production. Consequently, NBFC sector lending in rural areas has been as high as 80 per cent of usual levels.
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