Analysts have already predicted that due to the lockdown, India’s economic loss will be close to $ 234.4 billion or 8.1% of GDP
Companies may default on bank loans in the June quarter as they report zero sales and rising costs, prompting finance managers to ask the Reserve Bank of India to allow one-time restructuring of accounts without downgrading the account to non-performing assets (NPA) category.
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“Due to the Covid-19 outbreak, all sectors are affected. While some are affected severely, others are less severe. But the financial blow remains severe for all. Hence, permitting restructuring only to some sectors will not solve the problem on hand,” said the head of finance of a large conglomerate asking not to be quoted. One-time restructuring of loans will help every company and prevent cost-cutting measures like layoffs, he said.
“No company could envisage that its top line will be zero for over a month. Even after lifting the lockdown, sluggish demand will take its toll on the margins for a sufficiently long time,” he said. Mid-sized groups, which we are doing well just before the Corona outbreak, are already facing the crunch and are planning to cut salaries and delaying new hiring.
Source: Business Standard
