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Thursday, April 22, 2021

Explained: Why do Mumbai traders want Covid-19 restrictions rolled back?

With a $300 billion strong GDP, Mumbai is the financial and commercial capital of Maharashtra as well as India. How will the latest Covid-19 restrictions impact the state's economy?

Written by Laxman Singh , Edited by Explained Desk | Mumbai |
Updated: April 14, 2021 10:41:25 am
Maharashtra lockdown, Maharashtra economy, Maharashtra covid, Maharashtra curfew, Maharashtra Covid update, Indian ExpressShopkeepers stage a protest after the Maharashtra government issues orders to close all establishments due to the rise in Covid-19 cases, in Indiranagar, Thane, on April 7, 2021 (Express Photo: Deepak Joshi)

The new restrictions laid down by the Maharashtra government to contain the rapid increase in Covid-19 cases has severely impacted businesses in Mumbai, the financial and commercial capital of the country. The Indian Express explains what these restrictions mean for the economy of Mumbai.

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Why is Mumbai important to the state’s economy?

With a $300 billion strong GDP, Mumbai is the financial and commercial capital of Maharashtra as well as the country. Mumbai contributes roughly 5 per cent of India’s total GDP. The service sector accounts for much of the heft that Mumbai has as an economic powerhouse. Estimates suggest that Mumbai’s service sector industry has an annual turnover of over Rs 4,00,000 crore. The stalling of even half of the service industry would cause a wealth loss of Rs 16,000 crore a month.

Maharashtra lockdown, Maharashtra economy, Maharashtra covid, Maharashtra curfew, Maharashtra Covid update, Indian Express Shops in Thane market remain closed on Wednesday. (Express Photo: Deepak Joshi)

What are the restrictions put it in place by the state?

As per the guidelines, only essentials services are allowed to remain open. Hotels, restaurants, cinema halls, theaters, saloons, gyms, parlours, and clothing, shoes, toys, jewellery and furniture stories will have to shut their business till April 30.

As per the data available with the Brihanmumbai Municipal Corporation (BMC), the city has a total 9.09 lakh registered establishments. There are 3.17 lakh shops, 5.74 lakh commercial establishments, 15,080 restaurants and eating houses, 897 theatres and other amusement centres. Over 80 per cent of these establishments have had to shut down their businesses this month in view of the restrictions.

Why are the traders’ bodies, hospitality, retail and other sectors protesting in Mumbai?

With a lockdown-like situation in the state, the traders’ bodies and industries fear it will be the final nail in the coffin as their businesses were already severely impacted due to last year’s lockdown where everything was shut for almost eight months.

April 5, which was the first day of the curbs, saw a lot of chaos and confusion. While many non-essential shopkeepers in Mumbai, as well as Mumbai Metropolitan Region (MMR) areas, opened their shops citing they were under the impression they need to shut their shops only on weekends. Along with this, many parts of Mumbai and MMR also witness protests from shopkeepers who warned that this lockdown will take their lives before corona.

The hospitality industry and retailers have warned that new guidelines will have a catastrophic impact. As per the new guidelines, the state has asked these industries to vaccinate their staff as early as possible so that they can allow reopening. However, traders say most of their front office workers are less than 45 years of age and current vaccination guidelines allow vaccination for those above 45 years.

Maharashtra lockdown, Maharashtra economy, Maharashtra covid, Maharashtra curfew, Maharashtra Covid update, Indian Express The police instruct shopkeepers to keep their stores closed, in Thane on Wednesday. (Express Photo: Deepak Joshi)

How is the lockdown affecting the various industry sectors?

The hospitality and retail industries have said last year’s lockdown has caused them unprecedented damage. With the new restrictions the hospitality industry is staring at another year of similar or even worse consequences, says Hotel and Restaurants Association of Western India (HRAWI).

As per the industry data, over 20 per cent of the hospitality establishments haven’t opened fully even after the lockdown was lifted and 30 per cent of hotels and restaurants in the country have shut down permanently due to financial loss and caused job losses. Of the approximately 30,00,000 employees engaged in the hospitality industry directly in the state, 40 per cent have faced job loss and the figures are only increasing, says the HRAWI.

In the retail sector, traders said it will impact about 10,00,000 unskilled workers in Mumbai alone. Many will be left jobless and with salary cuts. Most of these shops and restaurants are on rent and are finding it tough to pay rents.

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What demands have been put forward by industry associations?

The traders’ body has demanded a completely rollback of the guidelines. They have also demanded a relief package from the government to help their business. As a quick relief, they want waiver of property tax, excise license fee and statutory fees along with a pause on generation of electricity and water bills until the industry becomes completely operational again. The retail association and hotel industry has said they should be allowed to open their shops on weekends as a major part of revenue comes on these two days.

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