India to take over a month to achieve a third of Industrial Output: Official

Economy


New Delhi: India will take more than a month to get back to at least a third of its earlier industrial output as companies emerge from the lockdown and grapple with supply chain obstacles and labour shortages, a senior government official said, adding that it will also take a while for demand to revive.

“A month is too short a time to assess and expect when the country is trying to come out of a crisis like this… it will take longer,” the official told ET. He was responding to a question on whether industrial output could recover to one-third of pre-Covid levels within a month from the planned resumption of economic activity, including manufacturing and construction.

The official said the government would try to swiftly address supply chain hurdles, which some fear could leave retailers without stock as wholesalers in many parts of the country are unable to resume activity.

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‘We have Sufficient Stocks’

“As of now, we have sufficient stocks and they are moving, and essential goods have also already started, so that chain (is moving),” he said. “The packaging, raw material of essential goods, was already there… We checked–in some cases it was between 50-60% of capacity.”

Acknowledging exodus of migrant workers back to their homes and supply chain stoppages as two key stumbling blocks, the official said, “Everybody will have to put their heads together, including central government, labour ministry, state governments and the industry.”

The lockdown began on March 25 and has been extended until May 17 although relaxations have been allowed to help factories start operations. ET reported Monday that the resumption will be muted as manufacturers have to contend with supply lines that run through green, orange and red zones, apart from other issues.

The labour ministry is currently working on ways to encourage people to come back to work. The government is likely to call a high-level meeting with industry to resolve that and supply chain issues. The conclave is expected to be held along the lines of the one chaired by the home secretary about 10 days ago.

The official said states and industry were already reaching out to workers across the country.

“Certain inertia had set in and it takes time to come out of that. So yes, these are the problems which we have to grapple with but we will resolve them. Finally, people (workers) will also come back,” the official said.

Demand will only pick up gradually to pre-Covid levels. “In sectors which do see high demand, we expect the manufacturers to pull together everything and start,” he said. In “industry where there isn’t demand, the manufacturer will have to wait.”

The official said the government wants to urgently address all industry worries, pointing out that it had ironed out supply chain blockages related to essential commodities in the initial phase of the lockdown. “There were some disruptions because of truck movement, but now that has reached a normalcy.”



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