APRIL 2020| EDITION 1

ECONOMIC POLICY

CONTRIBUTORS - Himanshi Bahl, Abhinav Kumar, Ramanand Nand, Tanya Batra

SOCIAL POLICY INTEGRATION

REGIONAL GOVERNANCE

COVID 19 LOCKDOWN AND PROBLEMS FOR THE

MANUFACTURING SECTOR

The COVID-19 pandemic is ushering in a host of challenges. The lockdown in India has entered its second phase

and many analysts have predicted that this extended period of economic inactivity will create obstacles for recovery

of the Indian economy. The manufacturing sector will be hit hard.

Internationally also the coronavirus pandemic had forced lockdowns across Asia over February and March,

paralyzing economic activity across the continent as factories shut bringing manufacturing to a halt. Improvements

were seen later as China’s factory activity picked up slightly more than expected in March after plunging a month

earlier but growth was marginal, highlighting the intense pressure facing businesses as domestic and export demand

slumps.

As the COVID-19

crisis continues to

expand, manufacturers

will likely face

challenges on numerous

fronts. At the outset of

any major commercial

disruption, companies

will be looking for

immediate measures to

keep their workforces

safe and their businesses solvent. India also faces a grim reality. Majority of those in the manufacturing sector

expect COVID-19 to impact their operations. Industrial manufacturers, especially those that depend on workers

whose jobs cannot be carried out remotely will be impacted severely. These issues will accentuate amid plummeting

oil prices and demand, supply chain bottlenecks, spending slowdowns and jitters over the credit markets that will

take a long time to normalise. The automobile, textile and engineering industries, among others would need to be

innovative and proactive in order to come up with ways to improve production as these are labour intensive.

Thus, the manufacturing sector, which employs millions workers will be disturbed by this outbreak, primarily for

two reasons-

1. Many manufacturing jobs are on-site and cannot be carried out remotely.

2. Slowed economic activity will likely reduce demand for industrial products in the US and globally.

The lockdown has created a tough situation with full or partial manufacturing plant closures that could continue in

hard-hit regions for a prolonged period. Before these restrictions are eased, given the nature of the industry,

manufacturers will need to consider how to create social distancing in workplaces that are typically worker-dense

(e.g., manufacturing plants, warehouses, material movements and logistics, etc.). The chaos that surrounded the

exodus of workers from industrial clusters like the NCR when the lockdown started on March 25 would serve as a

reminder before plans to ease the lockdown is set into place.

Manufacturing sector is likely face cash-flow liquidity challenges and difficulties in managing debt or get credit

easily. They need to brace for continued supply chain bottlenecks both nationally and internationally, especially in

those jurisdictions hardest hit by COVID-19. Manufacturers will likely face continued downward pressure on

demand, production and revenues as the COVID-19 pandemic intensifies.

Policy makers need to ensure that adequate steps are taken to kick-start the engine of the manufacturing sector.

Many companies in manufacturing would need governmental support to get back on track.

This is where the role of government stimulus

support becomes crucial. But there is a real

possibility that the crisis will result in

bankruptcy for some manufacturers, as

declining demand, production and revenues,

along with debt obligations, take their

cumulative toll.

Therefore, the industry may see some

manufacturers struggle to recover and even

declare bankruptcy, depending on how robust

and effective any government intervention

and support may be, and how long the

COVID-19 crisis lasts. Manufacturers should

put in place immediate and contingent safety

measures for their employees, and should

decide which functions can be carried out

remotely, if an outbreak were to occur within their ranks. As the COVID-19 pandemic escalates, the advanced

economies seem to be geared up for a manufacturing renaissance. India needs to follow suit. Because it probably

will not benefit very many advanced-economy workers, let alone the developing countries from which production is

being shifted.

The NON COVID DEATH TOLL

in late March, Zoran Lasic, an interventional cardiologist at Jamaica Hospital Medical Center and Lenox Hill

Hospital in New York, was finishing afternoon clinic when he was approached by a nurse colleague seeking his

advice. Her husband — a 56-year-old whose father died of sudden cardiac arrest at 55 — had been feeling chest

pressure. The pressure radiated down his arms and occasionally to his neck and, the previous day, had been

accompanied by dyspnea and diaphoresis, making him worried enough to call an ambulance. The emergency

medical technicians did an electrocardiogram, said it looked OK, and told him to call his primary care doctor. He

did, and he was advised that given New York’s Covid-19 outbreak, it was not a good time to go to the hospital.

Now, a day later, his colleague asked Lasic, what

should they do?

Meanwhile in India

In April 11, there was a tense verbal duel at Delhi's

Lok Nayak Jai Prakash Narayan (LNJP) Hospital,

where a large number of Coronavirus cases are

being treated, after a general category patient could

not be allowed emergency admission because of

overcrowding.

A doctor accompanying the patient said two other hospitals had already expressed their inability to admit him on

the same ground.

The incident aptly sums up a parallel health crisis that has begun unfolding at some hospitals in the city. With

doctors, both at private and government hospitals, neck-deep in treating COVID-19 cases, there's little relief for

thousands of general patients. Hospitals have either curtailed or shut routine health services in order to keep beds

reserved for COVID-19 patients.

General patients undergoing treatment at many hospitals have been left in the lurch. Ishfaq Ahmad, from

Saharanpur in West UP, had many cycles of radiation therapy left when the Delhi State Cancer Institute (DSCI) was

shut after 22 health care workers, including doctors and nurses, tested positive for COVID-19 a few weeks ago.

"We tried to go to a private hospital. But doctors there insisted that we should continue therapies at the same

hospital. I do not want his cancer to be back," said Ahmad's wife, Bilkis.

Ahmad had undergone a surgery in his mouth a month ago. The closed OPD at AIIMS has multiplied problems of

thousands of people from various parts of the country, who are stranded in shelter homes and on footpaths outside

waiting for the global pandemic to abate so they can be treated for their non-COVID ailments.

Most of these people accompany patients who have been referred for special treatment to AIIMS and Safdarjung

Hospital from their home towns

Many hospitals in Delhi have tele-medicine consultations after the Centre released guidelines but the response has

been slow, say doctors. At the Institute of Human Behaviour and Allied Sciences, for example, in a 12-hour tele-

consultation session, the hospital gets not more than three calls. As the coronavirus pandemic focuses medical

attention on treating affected patients and protecting others from infection, how do we best care for people with

non–Covid-related disease? For some, new risks may warrant reconsideration of usual standards of care. For others,

the need to protect caregivers and preserve critical care capacity may factor into decisions. And for everyone,

radical transformation of the health care system will affect our ability to maintain high-quality care. As Michael

Grossbard, chief of hematology at New York University’s Langone Hospital, told me, ―Our practice of medicine

has changed more in 1 week than in my previous 28 years combined.‖

Doctors not only in India but all over the world are concerned about the death toll of the patients not fron COVID-

19 but from lack of health care facilities.

However Indian Government have taken

many steps which include:

The government has set up two helpline

numbers -- 1) 104: For non-Covid-19

patients to be ferried back and from the

hospitals, and 2) 108: For blood donors to

travel to and from the hospitals.

Hospitals have also been asked to

separate wards for non-Covid-19

patients.

Meanwhile, the Delhi government has

ordered officials to move all non-

coronavirus patients from the dedicated

hospitals to other facilities by Sunday.

References

1. Https://www.pwc.com/us/en/library/covid-19/coronavirus-impacts-industrial-manufacturing.html. (n.d.). Here’s how coronavirus

has affected Asia’s factories. World Economic Forum. https://www.weforum.org/agenda/2020/04/asias-factory-activity-

coronavirus/

2. Marin, D. (2020, April 3). How COVID-19 is transforming manufacturing. Project Syndicate. https://www.project-

3. Manufacturing and COVID-19 - Institute for manufacturing (IfM). (n.d.). IfM Home

Page. https://www.ifm.eng.cam.ac.uk/manufacturing-and-covid-19-ways-your-company-could-help/

4. Manufacturing sector anticipates severe workforce crunch post COVID-19. (2020, April 10). The Economic

Times. https://economictimes.indiatimes.com/news/company/corporate-trends/manufacturing-sector-anticipates-severe-

workforce-crunch-post-covid-

19/articleshow/75084233.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

5. syndicate.org/commentary/covid19-and-robots-drive-manufacturing-reshoring-by-dalia-marin-2020-04 6. https://www.indiatoday.in/india/story/india-today-impact-centre-sets-up-helplines-non-covid-patients-blood-donors-1668478-

2020-04-18

7. https://www.nejm.org/doi/full/10.1056/NEJMms2009984?query=featured_coronavirus

Opinion | How COVID-19 is transforming global manufacturing. (2020, April 13). Livemint. https://www.livemint.com/opinion/online-

views/how-covid-19-is-transforming-global-manufacturing-11586794087405.html

CPRG NEWSLETTER APRIL, 2020 EDITION 1