The growing crisis from the second wave of Covid infection has started to slow down economic activity. In Maharashtra, Rajasthan, Madhya Pradesh, Chhattisgarh, Karnataka, and some southern states, the lockdown has reduced the pace of manufacturing activities. With this, the possibility of a decline in manufacturing and an increase in unemployment has intensified.
The decline in demand may reduce the speed of manufacturing
There is no significant decline in the IHS Market India Manufacturing Purchasing Managers’ Index. In April it was at 55.5, while in March it was at 55.4. But experts believe that there are clear signs of decline in manufacturing in May and June. In the coming time, Covid infection will increase rapidly and this will obviously lead to a drop in demand. Whereas the condition is that companies are already facing a decrease in demand due to an increase in prices at the global level. In some recent surveys, companies can reduce their production due to reduced demand. Recently, Ashok Leyland, the leading manufacturer of commercial vehicles in the country, has announced to reduce production by demand. The company will shut down its plants for a few days.
Problems will arise on the employment front
A crisis in the manufacturing sector will lead to bad conditions on the employment front. Because the employment situation in the service sector is already bad. The manufacturing sector gained momentum after the first wave of Covid was over, but in many industrialized states, the second wave of Covid has slowed down its activities. There are problems in the export market as well. Due to this, there is a possibility of sluggishness in the manufacturing sector. But the biggest sector of this may have to suffer the employment sector.