No.PR-104 May 29, 2020 New Delhi Maintaining Profitability Biggest Challenge and Increasing Sales Volumes Top Priority of the Business Firms, says PHD Chamber Industry Survey Industry body, PHD Chamber of Commerce and Industry has conducted an industry survey of 2,770 business firms which surprisingly depicts that liquidity is not a biggest challenge to business firms, but maintaining profitability is a biggest challenge at this juncture when there is a significant fall in business & consumer confidence, slump in production and sales, subdued demand conditions, squeezing working capital vis-à-vis piled up inventories. The survey was conducted by PHDCCI in the months of April- May 2020 to know the preparedness of the business firms to face post lockdown challenges and post lockdown business plans of the industry across the micro, small, medium and large enterprises across the sectors. While releasing the study in a Webinar on Industry Strategy in COVID-19 and Post COVID-19 Scenario held today by PHD Chamber of Commerce and Industry, Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry suggested the vital industry strategies such as integration of our economy with global supply chains, promotion of conducive business environment for attracting domestic and foreign investments, reduction in the costs of doing business and embracing of Industry 4.0 to increase efficiency and efficacy of business enterprises to combat the impact of pandemic COVID-19 on trade and industry. The survey report prepared by PHD Chamber has been submitted to PMO, Ministry of Finance, Ministry of Commerce, Ministry of MSMEs, among others. According to the survey, the top ten challenges for businesses in the post lockdown business scenario include · 61% of the respondents said maintaining price-cost margins/profitability · 60% opined Payment of wages/salaries to employees · 58% said availability of working capital · 53% stated repayment of loans/payment of EMIs · 52% said high costs of capital · 51% respondents said availability of finances/loans · 51% opined costs of social distancing · 51% said weakening of demand · 50% stated compliances of labour laws · 49% said retaining of the full workforce The survey has revealed the top ten plans of the businesses firms in the post lockdown business scenario · 67% respondents said increasing the sales volume · 65% opined enhancing competitiveness of business · 64% said cost cutting of business operations · 60% opined enhancing business operations in the domestic market · 58% stated focus on innovation, research & development · 53% respondents said enhancing the price-cost margin · 50% said reducing the workforce in business operations · 44% stated increasing the scale of business operations · 43% opined diversification of business operations · 36% said enhancing business operations in the international market Shri Sanjay Aggarwal, Senior Vice President, PHD Chamber in his special remarks during the webinar stated that Government should support the small businesses that are facing the issues of paying salaries to employees and subdued demand environment amid pandemic COVID-19. He suggested to increase public spending/investments, focus on building health and educational infrastructure along with buying technologies and not products from the foreign countries. Eminent experts Shri Ajay Shankar, Former Secretary, Government of India, Shri Kuntal Sensarma, Economic Adviser, DPIIT, Ministry of Commerce and Industry, Shri Sudhir Kumar, Adviser, NITI Aayog, Dr Rajesh Chadha, Program Director, Natural Resources, Brookings India, Prof. (Dr.) Kavita Sharma, Department of Commerce, Delhi School of Economics, among others participated in the webinar. Shri Ajay Shankar, Former Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India stated that the Government should further focus to bring back the demand in the economy to pre COVID-19 level along with reducing costs of doing business, re-focus on growth and developmental priorities to take our country at the global level with strengthened supply chains. Shri Kuntal Sensarma, Economic Adviser, DPIIT, Ministry of Commerce and Industry, Government of India stated that the Government is working tirelessly on the promotion of champion sectors and undertaking facilitation measures to provide boost to the manufacturing sector and to strengthen India’s position in global supply chains. Shri Sudhir Kumar, Adviser, NITI Aayog, opined that there is a need to focus on industry perspective on human resources as well as on increasing research & development and innovation in the industry. He added that in the current scenario, important questions are how to address demand and supply side disruptions, how to resume supply and demand of non-essential consumer goods and how to quickly ramp up production capacities. Dr Rajesh Chadha, Program Director, Natural Resources, Brookings India appreciated the reform measures announced by the Government on the commercialization of coal mining. He added that strengthening of the manufacturing sector is need of the hour to mitigate the impact of pandemic COVID-19 on trade and industry. Shri Deepak Pahwa, Chair, Industry Affairs Committee, PHD Chamber in his theme presentation opined that as part of industry strategy there is a need to focus on development of MSMEs sector, increase in research and development to boost Make in India, creation of business friendly environment in the country for domestic and foreign companies/investors, increase in localization, among others. Strengthening of the local supply chains, agriculture and food supply chain will not only fulfil the demand but also strengthen the supply dynamics and create tremendous employment opportunities for growing young workforce particularly in rural areas The widened definition of MSMEs along with other path breaking reforms announced by the Government will ensure that the MSMEs are able to resume, restart and revive from the current distressed times, said Dr D K Aggarwal. Going ahead, the costs of doing business, including cost of capital, cost of compliances, cost of logistics, cost of land and availability of land, cost of power/ energy and cost of labour, should come down in the country to attract foreign investors and provide a level playing field to industry, said Dr D K Aggarwal. Land reforms such as increase in the lease period should be focused upon. State should have ready land bank with developed infrastructure, so that the project can be started immediately. In addition, single window service should be strengthened to give clearance for all the permissions in 7 days to ensure faster and efficient action and decision-making, said Dr D K Aggarwal. Domestic capacity building should be encouraged to subside the volumes of imports and meet up the domestic demand with an increased presence in global exports, said Dr. Aggarwal At this juncture, we should target the companies from US, Japan, EU, which are desirous for shifting their base. This will promote Make in India and help the country to become the manufacturing hub with strong connectivity with global supply chains in the coming times, said Dr D K Aggarwal. The other esteemed speakers in the Webinar were Shri Vishwa Nath, Co-Chair, Industry Affairs Committee, PHD Chamber, Shri Vikram Agarwal, Co-Chair, Industry Affairs Committee, PHD Chamber, Shri Saurabh Sanyal, Secretary General, PHD Chamber and Dr S P Sharma, Chief Economist, PHD Chamber. Survey report attached Ends. Media Division PHD Chamber of Commerce and Industry
PHD Chamber of Commerce and Industry, established in 1905, is a proactive National Apex Chamber working at the grass-root level and with strong national and international linkages.