Coronavirus impact: 60% firms run at less than 25% capacity, says CII

Business Standard, April 27, 2020

Crippled by lack of inputs, funds and key information, 60% of firms are operating at less than a quarter of their full capacity, with just 10 per cent managing plant utilisation at over 50 per cent, a survey by the Confederation of Indian Industry (CII) shows.
The movement of workers and raw materials remain key hurdles to resuming businesses despite the government allowing major chunks of the industry to operate, the survey has pointed out.
Conducted on April 24, the survey shows that businesses consider getting permits for enterprises to restart, passes for daily travel of workers and establishing earlier supply chains, as their biggest headaches. For sectors allowed to function, 46 per cent of surveyed enterprises say permits are either not provided or are delayed. The CII has recommended that approvals of applications must have clear deadlines with a provision for automatic permits after the specified time.
“For facilitating restart of economic activities, the CII has suggested that in non-containment zones, businesses should be allowed to function without requirement of permits and only through intimation to local authorities. Workers can be permitted to commute on the basis of a letter issued by the employer organisation, with the facility to travel on own vehicles,” said Chandrajit Banerjee, director general of CII.
Labour and inputs
Regarding movement of workers, as many as 42 per cent of businesses argued that passes for employees are delayed or not available. Additionally, two-thirds of those surveyed have pointed out that transportation of employees between the workplace and home is an issue. As a result, 58 per cent of enterprises have less than a quarter of their employees turn up. “Less than one-tenth respondents have employment strength of more than half. This also indicates that social distancing norms are being followed,” the survey shows. Finally, more than a fourth of survey respondents cited lack of availability of workers or lack of ability to commute as reasons for not being able to start business.
The movement of inputs and finished goods remain on shaky ground. Only 15 per cent of surveyed firms have answered that movement is timely. While 39 per cent say they are experiencing delays, 23 per cent of businesses state that inputs are not available.
Fear factor remains
Despite the government clarifying on penalties for firms, 39 per cent of businesses fear that positive cases within the premises could invite criminal allegations against the business. The survey has said industry remains confused with the plethora of notifications being issued by the Centre and state governments with regards to guidelines during the lockdown and their subsequent clarifications.
Only 57 per cent of respondents agreed that guidelines issued by the Home Affairs Ministry regarding operational zones have been clearly communicated by state governments, it said. The survey shows 28 per cent of respondents noted that partial information was presented while the rest stated no information was made available.
Contrary to the complaints by industry bodies and export promotion councils, only 16 per cent of businesses surveyed by the CII say they are situated in the maximum restriction, coronavirus-hit red zone. On the other hand, 20 per cent say they are in municipal areas and could not operate. Many sectoral bodies have complained over the past few days that resumption of businesses meant little since most industrial townships hug larger urban areas, which are deep in the red zone.
Interestingly, only 1 per cent of enterprises cited inability to restart due to lack of capacity to implement health and safety protocols.

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