Expect the economy to completely open up in next few weeks

Expect more economic activities to open up soon. The government is now looking to fully open up the economy, including the aviation and railways, notwithstanding the rise in the number of coronavirus cases. India's economy contracted by 23.9 per cent in the April-June quarter of the current financial year—the worst since in its history.

“The only way to move ahead and get back on the growth track is to open up all economic activities at the earliest. We have to learn to live with Covid-19, take the necessary precautions, and get back to leading a normal life,” Narendra Taneja, national spokesperson of BJP.

As the government imposed a stringent nationwide lockdown for over two months, economic activities came to a halt during April and most part of May while the second quarter (July-September) “saw calibrated unlocking of the economy.”

“Several key services sectors like hotels, hospitality, airlines, railways are operating at a bare minimal level,” Assocham said, adding that it was critical to unlock the economy to revive growth.

Taneja added that while it is not prudent to provide “external” stimulus to boost demand, the opening up of economic activities along with easing of supply side will be critical. “There have been voices suggesting government intervention to boost demand and revive the economy but that unfortunately cannot be sustained in the long term and thus the real problem will not be solved,” Taneja said, adding that the demand for essential items is almost back to pre-Covid levels though discretionary demand is yet to pick up.

A study conducted by Anarock and Retailers Association of India (RAI), ‘Indian Retail – Certainty Despite Headwinds’, revealed that the average bill value for essentials has gone up by 1.5 times after the lifting of the nationwide lockdown. The average bill which was Rs 650 per basket in early March is now Rs 900 per basket.

“This could also be due to the pent-up demand,” an analyst said. A pent-up demand usually refers to a situation when the consumption rises suddenly after very low levels. This situation can often be seen in recessionary times.

The study shows that food and grocery, followed by apparel, electronics, furniture and home furnishings, could see a V-shaped recovery within the next two-three quarters.

“Covid-19 will work as a catalyst for the growth of organized retail and e-commerce in India,” said Anuj Kejriwal, managing director and CEO, Anarock Retail..