Chennai: Covid-19 has changed the way the ‘normal’ world functions. It has rattled the fundamentals and we are all trying to cope with the ‘new normal’ – a term that is amongst the most trending today.
Industries, across sectors and States in India and globally, have been greatly affected. Some bearing the brunt directly, while others facing the challenges indirectly, thanks to supply chain disruptions. While some businesses are sailing the tailwinds, most are grappling with the effects of this global pandemic. Consumer and business dynamics have literally changed overnight. This has forced us, as people and as organisations, to re-evaluate our preparedness to fight the disease and secure the future, for ourselves and our stakeholders.
Tamilnadu is the second largest state, contributing 9 per cent to national GDP. Its economy is balanced in terms of district-wise contribution to GDP. Tamilnadu accounts for 12 per cent Covid-19 cases in India. The State has seen an average 12 per cent daily case growth in the month of April, tapering to 5 per cent daily case growth in the fourth week of May.
As an industry or organisation or business, navigating this Covid-19 pandemic and its aftermath is a huge challenge, no doubt. It needs a methodology – a clear approach – to see through all the chaos, bring in a method to the madness, so to speak. It is crucial to clearly understand the economic landscape at a macro level, before and during this pandemic, to help extrapolate what could perhaps be the ‘after’ state of affairs at a micro-level.
It is with this thought process that Levers For Change (LFC), a decade-old Business Transformation Consultancy based in Indore, Madhya Pradesh, embarked on a detailed study, in an attempt to understand, and thereon share insights on, this truly unprecedented pandemic and its impact on the Indian economy.
The team led by Ankur Kumar (operating partner), reached out to all the stakeholders they had ever come in contact with over their decade-long journey. They connected with hundreds of stakeholders: CEOs, small business owners, farmers, large distributors, retailers, truck owners, and salaried employees across States.
He said given the alertness of the State government, in actively tracing and testing Covid suspects the State should recover from the Covid by end of July to mid-Aug, after a peak towards the end of May or beginning of June. The recovery of the economy is going to take time because the demand will take time to bounce back to pre Covid level. For Tamilnadu, most of the manufacturing is centred around the auto industry, the demand for which may rise unsustainably in the short term because of deferred buying.
According to the study, realty projects are now delayed in the Chennai Metropolitan areas as construction workers had to suspend works and prospective buyers put a hold on investments. The lack of inbound tourists from several countries has led to a sharp fall in hotel room occupancy, to a mere 30 per cent.
Transport corporations in the State lose Rs 1,200 crore during the lockdown.
Manufacturing second major contributor – 31.28 per cent of GSDP. With the total disruption in workflow and production schedule, the textile and clothing industry is facing its worst-ever crisis. Majority of workers are migrant labourers who have now started returning to their native places. Manufacturing activity in Tamilnadu, especially in and around Chennai, has come to halt with large auto and electronics companies deciding to shut their plants, as part of the effort to contain the spread of Covid-19.
The executive summary and the complete report is available for free download on https://leversforchange.in/covid-19-economic-impact-study-by-levers-for-change/