Modi stopped short of announcing any worthwhile plan to deal with the economic impact of the virus outbreak, which has thrown public life out of gear. The disruption caused to business and industry is not expected to end any time soon.

Worse still, the prime minister has entrusted the task of formulating an economic response to Finance Minister Nirmala Sitharaman, whose track record in dealing with anything related to economy and finance is highly suspect. She is already at a loss on what to do to get over the deep-rooted problems the economy has been going three in recent times. So, it is not difficult to imagine what she can come up to fight the economic impact of coronavirus.

Industry lobby FICCI has sought a combination of monetary, fiscal and financial market measures to help businesses and people cope with the crisis. In a highly proactive move, the industry body has already made an assessment of the impact of Covid-19 on the Indian economy. It calls for urgent steps to not only contain the spread of the virus but also address the key pain areas of the industry which can help in minimising the impact of the outbreak on the Indian economy and businesses.

The assessment concludes that the pandemic has significantly impacted the cash flow at organisations with almost 80 per cent reporting a decrease in cash flow. Over half of all Indian businesses indicate a marked impact of the virus outbreak on business operations even at the early stage. And if the problem persists, it will lead to incalculable consequences.

The pandemic has significantly impacted the cash flow at organisations with almost 80 per cent reporting a decrease in cash flow. It has also left a major impact on the supply chains, which the companies fear would worsen further in the days to come.

While for some of the sectors, the work from home proposition is posing implementation challenges as it has a direct bearing on the business operations. This is particularly true for manufacturing units where workers are required to be physically present at the production sites, and services sector like banking and IT where lot of confidential data is used and remote working can enhance security threat. Hence companies operating in these sectors are finding it difficult to implement work from home facility without compromising with their day to day operations.

With large scale cancellation of travel plans by both foreign and domestic tourists, there has been a drop in both inbound and outbound tourism of about 67% and 52%7 respectively since January to February as compared to the same period last year. Of all the segments of the hospitality sector, the Meetings, Incentives, Conferences and Exhibitions — popularly known as MICE segment — has been hit the most. Some of the major international business events have also been cancelled, including tech events such Mobile World Congress (MWC), Google I/O, and Facebook's F8 event, which has led to huge economic losses.

The tourism industry expects the situation to further deteriorate in March and in the forthcoming summer season i.e. April-June. Usually, the number of Indian travellers to both domestic and international destinations peak during the months of March and April. However, this time around nearly 90 percent bookings of hotel and flights for the peak time have been cancelled. Cruise bookings for destinations such as Thailand, Singapore and Malaysia have also been cancelled by travellers in huge numbers. According to the Indian Association of Tour Operators (IATO), the hotel, aviation and travel sector together may incur loss of about Rs 8,500 crore due to travel restrictions imposed on foreign tourists by India for a month. This is also expected to have a negative impact on jobs in the industry.

The lock-down has had a devastating impact on e-commerce businesses. Given the likelihood of such lockdowns being extended to several regions across the country, FICCI fears unintended consequences on the e-commerce industry as some of their operations get disrupted. This could affect the e-commerce business, especially at a time when there is a surge in demand for home delivery of goods under present circumstances.

Among other recommendations, the industry body has called for measures to support the fintech sector, which is emerging as a backbone for the banking industry and can play an increasingly important role, especially at a time when RBI is laying focus on promotion of digital banking.

As was the case during demonetisation, the crisis has provided an opportunity for promoting digital payments over cash transactions. Since usage of cash can be a source of virus spread, there is a need to give a renewed thrust on promoting digital payments and digital banking. FICCI recommends that the government must reinstate subsidies for digital payments for transaction below Rs 2000 immediately. (IPA Service)