CARGO VOLUME DROPS 22% IN APRIL-MAY
NEW DELHI: Cargo volume handled by the country’s major ports dropped 22% during the first two months of the ongoing fiscal to 92.82 million tonnes (mt) amid the coronavirus lockdown, as per industry data. These 12 ports had together handled 119.23 mt of cargo during April-may period of 2018-19, the Indian Ports Association (IPA) said. Ports like Chennai, Cochin and Kamrajar saw their cargo volumes nosedive over 40%, while Kolkata and JNPT suffered a drop of over 30% during April-may. India has 12 major ports under the control of the central government— Deendayal (erstwhile Kandla), Mumbai, JNPT, Mormugao, New Mangalore, Cochin, Chennai, Kamarajar (earlier Ennore), V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia). These ports handled 705 mt of cargo in the last fiscal.
It is about how you look and define economic recovery. We are in a completely new era post Covid-19 and thus, revival cannot be evaluated on average. In fact, in CII, we decided against giving a projection on growth or on GDP. If you look at how capital markets or investors are viewing India and the earnings of the corporates, this year is already a wash out and the attempt will be to get back earnings to the February levels by next year. We have to start looking at growth from 2021-22.
The economy has been deeply impacted by the shock coming from the health sector. There has been a lockdown for over two months and even while we reopen gradually, different parts of the country will remain closed. The loss in jobs and livelihoods will leave its impact on the demand side as
I do not want to enter into a debate with an industry colleague. However, we are talking about a hypothetical situation and we cannot say what would have happened if there was no lockdown. It is certainly likely that the infection would have spread much faster and the government would not have had the time to ramp up the health infrastructure. Further, given the structure of Indian families, it is not practical to say that young people should be allowed to go to work while the elderly stay at home, as they all live together.
Our suggestions are laid out in the CII note which gives 10 points which are a combination of short-term and long-term priorities. In the short term, the need is to protect lives and livelihoods. In the medium term, we need to create a foundation for sustainable growth through investments in health, education and nature. A rural-urban re-balance is also required to
The government has laid out a well-crafted package, which is an excellent beginning for spurring economic recovery. Given that the government is fiscally constrained, it has done well to limit its immediate fiscal spending. For example, the MSME [micro, small and medium enterprises] credit guarantee programme will entail spending only after a few years in case of default. Yet, the fact that the government is providing guarantee of ₹3 lakh crore will encourage banks to lend to these enterprises. Of course, depending on the economic trajectory, more may be required at a future date. But the government will need to balance its fiscal spending against the need for financial stability, given that India does not have a reserve currency.