GDP to take Rs 15,000-20,000 crore hit from strike: ASSOCHAMWhile sharing some of their concerns like rising prices, ASSOCHAM today appealed to the central trade unions to call off their two-day strike as the country’s economy will take a hit of big hit of Rs 15,000-20,000 crore from the nation-wide disruption in economic activity.
“The national economy, battling slowdown can ill-afford this situation. In fact, the strike would aggravate the price situation because of disruption in the supply line of essential commodities”, said Mr. Rajkumar Dhoot President ASSOCHAM.
Mr. Dhoot further said the strike would cripple mostly the services sector like banking, insurance and transport, besides the industrial production. Even the agriculture would be affected as the movement of vegetables, highly perishable items, would be disrupted.
The ASSOCHAM has estimated the national loss figures based on the daily erosion of about 30-40 per cent to the country’s Gross Domestic Production (GDP) for two days. As per the Advanced estimates of the CSO, the national GDP for the current financial year is projected to be about Rs 95 lakh crore. In other words, it is Rs 26,000 crore per day and Rs 52,000 crore for two days. Of this , the strike would take its toll on at least 30-40 per cent – Rs 15,000 crore-Rs 20, 000 crore.
“Given the nature of the strike and involvement of the all the five major central trade unions, it is going to affect largely the services sector including the banking, financial services, tourism, transportation etc, which are the major contributors to the country’s GDP”, added Mr. Dhoot.
States like West Bengal, Kerala, Maharashtra, Gujarat, Tamil Nadu, Delhi, Haryana, Karnataka and parts of Uttar Pradesh are likely to be affected significantly. Besides, banking operations including the cheque clearances and some segments of the financial markets would take a hit. Moreover, disruption in railways and other public transportation in major cities would hit the movement of the workforce and the cargo operations at the ports.
The cargo operations both at the airport and ports are likely to be affected, the chamber apprehends.
“Our conservative estimates show that at least 30-40 per cent of the daily GDP would take a hit. For two days, it would be something like Rs 15,000-20,000 crore,” reveals the ASSOCHAM Economic Research (AER) department.
Expressing concerns over the impending strike, the Mr. Dhoot said, it would not be in the interest of the country’s economy to stop work in the crucial sectors. “While we share some of the concerns like rising prices, the solution lies in working together to ensure that the situation is brought under control by raising production and pumping up the supply. The strike, in fact would put further pressure on the price situation as the prices of vegetables etc would immediately go up because of disruption”.
He said the GDP growth is projected to be at a decade low of about five per cent and several sectors like manufacturing are operating at a much lower scale and work disruption would make a big dent on the economic activity.
“Besides, the services sector which has remained backbone of the economy, has also started slowing down,” he said.
As per the chamber estimates, despite global slowdown and difficult domestic conditions, the Indian industry has not really resorted to job trimming and has generally been working in partnership with the labour-force.
“The labour force is a very important stakeholder in the national activity. In fact, it is the human resource which is India’s advantage vis-à-vis several other high cost economies. Thus, welfare of the workforce is on top of the priorities of the industry and ASSOCHAM is fully committed to ensuring their welfare,” added Mr Dhoot.
He appealed to leaders of the all the central unions including CITU, AITUC, INTUC and BMS to engage with the government and find amicable solutions to the issues raised by them. The Industry shares some of the concerns like rising prices, but then “we need to work together to resolve the issue and ensure better supplies which is possible by higher investment and production. The workers’role in this area too is of paramount importance,” he said.
Mr. Dhoot also appealed to the government to immediately engage with the labour unions to find out amicable solutions to the issues raised by them.