NEW DELHI: Industry association All India Motor Transport Congress (AIMTC), representing India’s road transport community, said on Wednesday that the sector is taking losses of around Rs 1,000 crore a day due to rapidly expanding lockdowns and curfews. These losses could spike further, it added, if specific relief measures are not taken to mitigate the situation.
On April 12, when restrictions had been re-imposed in Maharashtra, AIMTC’s research unit had assessed daily losses to the segment of about Rs 315 crore per day. The expansion of similar measures across India, despite the absense of a nation-wide lockdown, has more than tripled this in just over a week. According to a fresh assessment, daily losses to the transport industry have mounted to about Rs 1,000 crore per day and are continuing to rise in tandem with the duration and intensity of lockdowns.
States such as Delhi, Punjab, Rajasthan, Uttar Pradesh, Madhya Pradesh, Karnataka and others have also imposed strict restrictions on the movement of non-essential goods—a move that has resulted in demand for vehicles going down by about 50 per cent. In order to sort out the problem and offer relief, AIMTC sought proactive steps from the government such as a moratorium on equated-monthly instalment (EMI) payments, tax and insurance waivers, and an extension in e-way bill validity.
The lockdown and night curfews extended to other states (after Maharashtra first imposed it), has disrupted the business, said AIMTC, going on to note that financial delinquencies have hit micro loans, MSMEs, and the commercial vehicles’ financing segment. “This is going to further deepen the crisis,” it warned, adding that immediate, prudent, and proactive steps, therefore, must be taken.
Sector’s financial health to worsen
AIMTC’s research unit has predicted a deterioration of the financial situation where payments are not forthcoming. This is due to low consumption, and in cases where demand is high, the fact that manufacturers are unable to realise proceeds from such sales.