Suman Chowdhury, Chief Analytical Officer at Acuité Ratings & Research on the lockdown extension

"The extension of the Covid lockdown was expected given the risks that a resumption of regular economic activities can pose to the serious efforts being made by the government to control the outbreak of the pandemic. Clearly, a protracted lockdown will continue to have adverse implications on the domestic economy with daily economic losses of such large scale disruption pegged at USD 4.6 billion by our earlier study. However, we think progressive relaxation on certain economic activities may be made post April 20 at a local level depending on the extent of the outbreak in that area. We also expect an improvement in transportation of essential goods and services which will ensure no spike in food prices during the crisis period and also a production pickup in some sectors such as packaging and food processing. Further, production is also likely to gradually resume in process plants such as chemicals, cement steel etc. which are not labour intensive and which are in non-hotspot locations. Acuité also believes that the current period is a good opportunity to activate the eNAM or the national digital market for trading in farm products which will ensure contactless sale and distribution of the harvested Rabi crop and better income to the farmers."

Source : Equity Bulls

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