“The overall recovery in the economy will take between 2-3 years. But, we will see sectors come up very quickly. Some important sectors with large multiplier and large potential for employment, which are still struggling, and without support, they will actually not be able to fully recover in this time,” Munjal said.
He was speaking at a SBI-hosted virtual banking and economy conclave on the “impact of COVID-19 on business and economy”.
There is a need for “intervention”, some of it as structural and longer-term permanent requirement for the overall system and some for the present times, he said adding that “the government needs to be prepared not just to provide monetary support but at least two more doses of fiscal support, sectorally and may be even at some point of time picking individual entities (as well)”.
Munjal said the road to recovery is going to be “rocky” and uneven because there will be sectors that will not recover.
“That is one negative thing which is worrisome. Some companies will shut shops and will not even know why they did so and will not be able to recover and a large number of these companies will be small and medium-sized companies,” he said.
Munjal said some businesses will have a quick recovery partially because of the base effect and partially because of pent-up demand.
“We have seen it in motorcycle and bicycle segments, they have in fact upped their target twice within a month. We have seen it across different sectors,” he added.
Stating that the demand hit and job losses are real, Munjal said the prospect of job losses is “quite scary”, and can reach upwards of 20 per cent.
“I am not sure we have done enough thinking about the social fallout of that. This is something that we never experienced in our living memory. Small- and mid-sized companies are scared to bring people back. The motto is survival now, recovery sometime away, and then we will thrive,” Munjal said.