Even after the virus pandemic is resolved across the world, it will take at least up to six months for the passenger transport industry to return to normal, opines A Afzal, Chairman and Managing Director, AB Business Enterprises – The Parveen Group
Impact on Business and Recovery Strategy
Since we have a mix of operations such as staff, intercity and tours, we have been able to provide half-month salary for March and hope to pay the balance half by the end of April. For April we may end up paying only half-month salary as not many companies are coming forward to settle their debts given the fact that they too are in the same condition. The comeback plan doesn’t seem to be encouraging till the end of July 2020 considering that transporting passengers is never a priority in this hour of crisis. Hence, passenger transport will be the worst hit for this year.
In my opinion, banks should come forward to offer a minimum six months of moratorium without interest and also an additional 20% working capital to restart the business. Unless the central government pushes the Reserve Bank of India to instruct the banks, this may not happen. And if it does not, there will be the monster of huge unemployment staring at us. As said, the tourism industry may take at least six months to revive.
BS VI Transition
As for BS VI, it is not a serious issue at least for a year as the pollution level worldwide has reduced drastically. Therefore, you may not see any increase in demand for purchase of new vehicles. The government needs to be less stringent about the norms. I believe that many of the stakeholders are approaching the Supreme Court to find a solution for this issue, which also relates to shortage of materials.
Expectations from Government
The central government needs to provide support to transporters in the form of exemption of three months’ road tax, insurance and toll. Drivers need to be paid ex-gratia for three months. In the overall scheme of things, banks need to reach out to the operators. The following 12 months, at the least, are going to be very difficult, and will be made more so if the unemployment crisis is not handled immediately.
Outlook: Present and Future
The automotive industry is not going to see any positive phases this year. If at all there is a transition towards improvement, we may witness it from January 2021 when there could be some pick-up in activity and sales. The passenger transport industry is never going to be the same in India. The slowdown that the pandemic has created will take a long time to return to a normal scenario. However, there is hope that things may start looking up after six months and herald a big boom next year. One thing is for sure: there will be drastic behavioural changes in society and a lot more discipline will come into force. The movement of people will naturally increase after the lockdown period ends. All this will make way for new rules and regulations.