Movement of workers and raw materials key hurdles in restart of businesses: CII survey

While state governments have mostly clearly communicated restart guidelines to businesses, firms are facing hurdles in movement of workers and raw materials in commencing operations. These are the findings of a nation-wide survey conducted by the Confederation of Indian Industry (CII).

“The CII survey indicates that permits for enterprises, passes for workers and supply chain movement are the key hurdles for industry in exit from lockdown. For facilitating restart of economic activities, 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. Moreover, workers can be permitted to commute on the basis of a letter issued by the employer organisation, with the facility to travel on their own vehicles,” said Mr Chandrajit Banerjee, Director General, CII.

The survey was conducted to determine the effectiveness of the exit from lockdown in specified zones and sectors and elicited responses from across the country, covering many sectors and enterprises of all sizes.

A majority of respondents stated that guidelines issued by the Ministry of Home Affairs on 15 & 16 April on operational zones in rural and urban areas are clearly communicated by state governments. 57% agreed that they had clarity while 28% noted that partial information was available. Only 15% stated that incomplete or no communication was made available, noted the CII survey.

For sectors allowed to function, 46% of the CII surveyed enterprises said that permits are either not provided or are delayed. However, over two-fifths of respondents received permits smoothly.

CII recommended that approvals of applications must have clear mandated deadlines with a provision for automatic permits after the specified time.

Regarding movement of workers, as many as 42% of respondents in the CII survey stated that passes for employees are delayed or not available. Similarly, two-thirds of those surveyed pointed out that transportation of employees between the workplace and home is an issue.

As a result, the employee strength of 58% of enterprises was below 25%, with less than one-tenth respondents having an employment strength of more than half. This also indicated that social distancing norms are being followed, according to the CII press release.

“The CII survey confirms that return of workers is critical to commencing business operations. Timely and effective transport and safety strategies are imperative to ensure that workers have the confidence to return to workplaces as well as commute on a daily basis, ” said Mr Banerjee.

The movement of inputs and finished goods came up as a major hurdle. Only 15% of the respondents answered that the movement is timely, while 39% are experiencing delays and as many as 23% stated that inputs are not available.

The CII survey results showed that the majority of firms are operating at less than 25% of their full capacity, with just 10% having plant utilisation of over 50%.

Interestingly, only 1% of enterprises cited lack of capacity to implement health and safety protocols as impacting their restart. 16% said that their businesses are in the red zone, while 20% were located in municipal areas and could not operate.

More than a fourth of survey responses cited lack of availability of workers or lack of ability to commute as reasons for not being able to start business. 23% of the CII surveyed firms claimed multiple reasons coming in the way of exit from lockdown.

While fear of coronavirus cases impacted the opening decision of only 4% of respondents, as many as 39% fear that positive cases could invite criminal allegations against the business. The clarification issued by the MHA that this would not be the case would go a long way to instil confidence and encourage more businesses to open up, said CII.