With the BANDH turning violent in some parts of the country and bringing sense of insecurity among the industry and the workforce, the ASSOCHAM fears that the loss to the GDP would be more than its initial estimates as almost 50 per cent of the economic activity has been hampered by the strike.
Against its initial estimates of Rs 15,000-20,000 crore, the GDP may be eroded by about Rs 26,000 crore, it is apprehended based on the damaging effect of the Bandh on the industrial activity and the services sector like banking, finance. The financial capital of Mumbai has been hit badly.
In most of the industrial states and enclaves the attendance was poor leading to curtailing of productions shifts. With city transport being affected adversely, the footfalls in the retail trading markets also considerably declined, even though some of the markets remained opened.
“In the wake of more than expected disruption, we estimate the loss to the GDP in today and tomorrow’s Bandh to be in the region of Rs 25,000- Rs 26,000 crore – near 50 per cent of the economic activity,” said head of the ASSOCHAM Economic Analysts Team.
Expressing concern over incidents of violence and torching of public and private property, the chamber appealed to the union leaders to prevail upon their rank and file and ensure that the ugly incidents do not take place. “Such incidents completely shake confidence of the industry and the market for which security and peace is of paramount importance. Besides, the retail customers choose to stay indoors leading to considerable fall in the trading business – the lifeline of the country’s economy” said chamber President Rajkumar Dhoot.
The ASSOCHAM analysis apprehends the loss to the country’s GDP would work out to about 13,000 or more today itself.
The economy at this point of time is battling local and global slowdown cannot afford disruption. The strike would dent the market confidence as well, said the chamber president.
ASSOCHAM reports from different parts of the country suggested that the banking sector was the worst hit followed by local transport. The small and big retail trade had less of footfalls.
The situation in the vegetable mandis would be worse tomorrow and it is feared the prices of fresh eatable items like vegetables, milk, bread, eggs and meat may increase hitting the common-man who is already reeling under inflation.
The ASSOCHAM had earlier estimated the national loss figures based on the daily erosion of about 30-40 per cent to the country’s Gross Domestic Production (GDP) for two days. The disruption may go up to 50 per cent, it is feared.
As per the Advanced estimates of the CSO, the national GDP for the current financial year is projected to be about Rs 95 lakh crore. In other words, it is Rs 26,000 crore per day and Rs 52,000 crore for two days. Of this, the strike may now take its toll on at least 45-50 per cent to Rs 25,000 – Rs 26,000 crore.