Ad-Hoc Local Lockdowns Detrimental to Recovery of Indian Economy

Although the intentions are that of citizen safety and social distancing, the recent instances of local lockdowns and ad-hoc restrictions being imposed in UP, Maharashtra, AP and Karnataka are making a distressing impact on retail businesses, says RAI...

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The long road to recovery for the Indian retail industry continues to meet stumbling blocks with numerous restrictions being imposed at the state and local levels. Total lockdowns in some places and limited operational hours and days in several others are creating setbacks for retailers as the already stressed retail businesses are getting further interrupted and in turn dampening consumer sentiment.

Retailers Association of India (RAI) said in a statement mentioned, “Although the intentions are that of citizen safety and social distancing, the recent instances of local lockdowns and ad-hoc restrictions being imposed in UP, Maharashtra, AP and Karnataka are making a distressing impact on retail businesses. Retailers are already facing huge setbacks in terms of payment of wages and rentals due to very low sales of about 40 percent as compared to last year, which is due to the extended lockdown.

• The restrictions imposed by States Governments are further compounding the situation and posing significant operational issues.

• The restricted hours of operations, stoppage of staff and goods vehicle has resulted in hindered supply chains and skewed buying patterns.

• Shops being allowed to open for a shorter number of hours leads to crowding because demand is inelastic. This is detrimental to social distancing. It is also creating havoc on the supply side affecting availability of goods.

• The ad-hoc restrictions that keep changing create confusion about what is allowed and what is not. This is resulting in law enforcement stopping goods vehicles and employees from reaching stores creating supply chain and staffing issues.