India - Covid19 Factsheet-compressed (1)

Covid-19Factsheet

India

Copyright © 2020 Rubix. All rights reserved.

of15

COVID-19 Factsheet

India

Country Specifications Elements Details

Country India

Whether the country is/was

under Lockdown (LD)?

Yes, the country has moved into Unlock 2, which

began on July 1, 2020.

Period of LD

Start date: March 25, 2020

End date: Phase-wise unlocking has begun on June 1,

2020. However, different states are announcing periodic

lockdowns of impacted cities/ regions to help contain

the spread of COVID-19.

of15

Government Intervention Elements Details

Restrictions Imposed in the

Country

• Curfew from 10:00 P.M. to 5:00 A.M. during

which people aren’t allowed to go out unless

there is an emergency.

• Schools, colleges, educational and coaching

institutions will remain closed till July 31, 2020.

Online learning and distance learning will be

permitted.

• Metro rail, cinema halls, gymnasiums, swimming

pools, entertainment parks, theatres, bars,

auditoriums, assembly halls, and more will

remain closed.

• International travel, except as permitted by MHA

will remain closed.

• Social, political, sports, entertainment,

academic, cultural, religious functions, and other

large gatherings will remain prohibited.

• Training institutions of Central and State

Governments have been allowed to reopen from

July 15, 2020. They are required to follow

Standard Operating Procedure which will be

issued by the Department of Personnel and

Training.

• It is mandatory to wear face masks in the public,

workplaces, and in transportation.

• People must maintain remain 6 feet apart

in public spaces and shops to ensure social

distancing in public.

Support extended to the

Industries at risk by

Government

General information

The Ministry of Finance announced an INR 1.7 trillion

(USD 22 billion) relief package on March 26, 2020.

Tax measures

Reporting relating to GAAR and GST under the Tax

Audit Report has been kept in abeyance till 31 March

2021.

Implementation of a new procedure for approval/

registration/notification of certain entities like

(charitable/religious trusts, universities, educational

institutions, hospitals, etc.) is deferred to 1 October

2020.

Income tax related announcements:

• To provide more funds at the disposal of the

taxpayers, the rates of tax deduction at source for

non-salaried specified payments made to

residents and rates of tax collection at source for

the specified receipts are reduced by 25 per cent.

of15



Government (continued)

• Payment for contract, professional fees, interest,

rent, dividend, commission, brokerage, etc. shall

be eligible for this reduced rate of tax deduction

at source. This reduction shall be applicable for

the remaining part of the financial year

2020-2021.

• However, there will be no reduction in rates of

tax deduction at source or tax collection at

source, where the tax is required to be deducted

or collected at a higher rate due to

non-furnishing of PAN or Aadhaar.

• All pending refunds to charitable trusts and

non-corporate businesses, shall be issued

immediately.

• Due date of all income-tax returns for the

financial year 2019-2020 is extended from July

31, 2020, and October 31, 2020, to November

30, 2020, and tax audit from September 30,

2020, to October 31, 2020.

• Date of assessments getting barred on

September 30, 2020, is extended to December

31, 2020, and those getting barred on March 31,

2021, are extended to September 30, 2021.

• Period of Vivad se Vishwas Scheme for making

disputed tax payments without any interest or

penalty is extended from June 30, 2020 to

December 31, 2020.

Employment-related measures

Food-related

• About two-thirds of the population will be

covered under the Pradhan Mantri Garib Kalyan

Anna Yojana (Food scheme).

• Everyone under this scheme will get 5 kilograms

of wheat and rice for free in addition to the

current 5 kilograms allocation for the next 3

months.

• In addition, 1 kilogram of the preferred pulse

(based on regional preference) will be given for

free to each household under this Food scheme

for the next three months.

• This distribution will be done through the Public

Distribution Scheme (PDS) and can be availed

in two instalments.

Direct benefit transfer related

• Farmers currently receive INR 6,000 every year

through the PM-KISAN scheme (minimum

income support scheme) in three equal

instalments. The government will now be giving

of15



Government (continued)

the first instalment upfront for the fiscal year

starting April 2020.

• Mahatma Gandhi National Rural Employment

Guarantee Act, 2005 (MGNREGA) workers

wage increase from INR 182 to INR 202 per day.

• 30 million senior citizens, widows, disabled to

get a one-time amount of INR 1,000 in two

instalments over the next 3 months.

• 200 million women Jan Dhan account holders

will be given an amount of INR 500 per month

for the next 3 months, to run the affairs of their

household.

• Women below poverty line covered under

Ujwala scheme will get free LPG cylinders for 3

months.

• For 630,000 Self-help Groups (SHGs), the

government is doubling collateral-free loans to

INR 200,000.

• State governments have been directed to use

the welfare fund for building and construction

workers. The District Mineral Fund, worth about

INR 310 billion, will be used to help those who

are facing economic disruption because of the

lockdown.

Other:

• The Securities and Exchange Board of India

(SEBI) temporarily:

○ Relaxed the norms related to debt default

on rated instruments

○ Reduced the requirement average

market capitalisation of public

shareholding and the minimum period of

listing

• The SEBI reduced broker turnover fees and

filing fees on offer documents for public issue,

rights issue, and buyback of shares

of15

Elements Details

Change in Monetary Policy

• The Reserve Bank of India (RBI) reduced the

repo and reverse repo rates to 4% and 3.35%,

respectively

• The RBI announced liquidity measures across

three measures comprising:

○ Long Term Repo Operations (LTROs)

○ A cash reserve ratio (CRR) cut of 100

bps

○ An increase in the Marginal Standing

Facility (MSF) to 3% of the Statutory

Liquidity Ratio (SLR) till the end of

September

• CRR maintenance for all additional retail loans

has been exempted

• The RBI will continue to provide relief to both

borrowers and lenders through end-August

• The implementation of the net stable funding

ratio and the last stage of the phased-in

implementation of the capital conservation

buffers were delayed by six months

• The RBI created a facility to help with state

governments’ short-term liquidity needs, and

relaxed export repatriation limits

• The RBI introduced regulatory measures to

promote credit flows to the retail sector and

micro, small, and medium enterprises(MSMEs)

• The RBI provided regulatory forbearance on

asset classification of loans to MSMEs and real

estate developers—extended to loans from

NBFCs

• The priority sector classification for bank loans to

NBFCs has been extended for on-lending for FY

2020/21

• In mid-April, the RBI announced:

○ A TLTRO-2.0—funds to be invested in

investment-grade bonds, commercial

paper, and non-convertible debentures of

NBFCs

○ Special refinance facilities for rural

banks, housing finance companies, and

small and medium-sized enterprises

○ A temporary reduction of the Liquidity

Coverage Ratio (LCR) and restriction on

banks from making dividend payouts

○ A standstill on asset classifications

during the three-month loan moratorium

period with 10% provisioning

requirements

of15


(continued)

• An extension of the time period of resolution

timeline of large accounts under default by 90

days

• States’ Ways and means Advance (WMA) limits

have been increased by 60% and the limit for

the central government’s WMA for the remaining

part of the first half of the FY 2020/21 has been

revised up to INR 2 trillion

• The RBI asked financial institutions to assess

the impact on their asset quality, liquidity, and

other parameters from the COVID-19 pandemic

shock and take immediate contingency

measures

• In late April, the RBI announced:

○ A special liquidity facility for mutual funds

(SLF-MF)

○ A fixed-rate 90-day repo operation for

banks exclusively for meeting the liquidity

requirements of mutual funds

○ Regulatory easing for liquidity support

availed under the special liquidity facility,

extended to banks’ own deployed

resources

• The government announced measures

specifically targeting businesses, including:

○ A collateral-free lending program with a

100% guarantee

○ Subordinate debt for stressed MSMEs

with a partial guarantee

○ A partial credit guarantee scheme for

public sector banks on borrowings of

non-bank financial companies, house

finance companies (HFCs), and

microfinance institutions

○ A Fund of Funds for equity infusion in

MSMEs

○ A special purpose vehicle (SPV) to

purchase the short-term debt of the

eligible NBFCs and HFCs, fully

guaranteed by the government and

managed by a public sector bank

• The RBI undertook further regulatory easing,

including:

○ The increase in the large exposure limit

○ The relaxation of some of the norms of

the state government financing

○ Credit support to exporters and importers

○ An extension of the tenor of the small

businesses refinancing facilities

• The RBI extended the benefit under interest

subvention and prompt repayment incentive

of15


(continued)

• schemes for short-term agricultural loans until

August 31st, 2020

• The GST council announced that it would halve

the interest rate charged on overdue filings of

small businesses

• The RBI directed banks to assignment 0% risk

weight on the credit facilities extended under the

emergency credit line guarantee scheme

(IMF Editors 2020)

Change in Fiscal Policy

● Direct spending and foregone/deferred

revenue-based measures (1.9% of the GDP):

○ In-kind (food, cooking gas, etc.) and cash

transfers to lower-income households

○ Insurance coverage for workers in the

healthcare sector

○ Wage support and employment provision

to low-wage workers

● Postponing some tax-filing and compliance

deadlines

● Reduction in the penalty interest rate for overdue

GST filings

● Providing credit support to:

○ Businesses (1.9% of the GDP)

○ Poor households—especially migrants

and farmers (1.6% of the GDP)

○ Distressed electricity distribution

companies (0.4% of the GDP)

● Targeted support for the agricultural sector

(0.7% of the GDP)

● Other miscellaneous support measures (around

0.3% of the GDP)

● An additional INR 150 billion (around 0.1% of the

GDP) for health infrastructure

● Financial sector measures for micro, small, and

medium-sized enterprises and non-bank

financial companies

● An additional support to farmers in the form of

concessional credit and a credit facility for street

vendors

(IMF Editors 2020)

of15

Exchange Rate and Balance of

Payments

● The RBI announced a second FX swap—USD 2

billion, 6 months, auction-based—in addition to

the previous one with equal volume and tenor

● The limit for FPI investment in corporate bonds

has been increased to 15% of the outstanding

stock for FY 2020/21

● Restriction on non-resident investment in

specified securities issued by the Central

Government has been removed

● Foreign direct and investment policy has been

adjusted requiring that an entity of a country that

shares a land border with India can invest only

after receiving government approval

(IMF Editors 2020)

Elements Details

Measures taken by the

Government to mitigate Impact

of COVID – 19

Ministry of Micro, Small, and Medium Enterprises

(MSMEs) Relief

• INR 3 Trillion (USD 39 billion) collateral-free

loan with 100% credit guarantee.

• INR 200 billion (USD 2.6 billion) subordinated

debt for stressed MSMEs

• INR 500 billion (USD 6.5 billion) equity

infusion for MSMEs with growth potential and

viability through Fund of Funds

• The new definition of MSMEs – investment limit

revised upwards; additional criteria of turnover

introduced.

• No global tenders for government contracts up

to INR 2 billion (USD 26 million)

• E-market linkage to be promoted as replacement

of trade fairs and exhibitions

• MSME dues to be cleared within 45 day

Non-banking financial institutions (NBFCs) Relief

• INR 300 billion (USD 3.9 billion) liquidity

infusion for non-banking financial institutions,

housing finance companies, and microfinance

institutions.

• INR 450 billion (USD 5.9 billion) partial credit

guarantee scheme for non-banking financial

institutions.

of15

Power Utility Relief

INR 900 billion (USD 11.7 billion) liquidity infusion to

distribution companies (DISCOMs ) against

receivables guaranteed by the State government for

the exclusive purpose of discharging liabilities to

power generating firms.

Measures taken by the

Government to mitigate

Impact of COVID – 19

(continued)

Real estate sector, engineering

procurement construction (EPC) and

contractors

• Extension of up to 6 months to be provided by

all Central Agencies (like Railways, Ministry of

Road, Transport & Highways, Central Public

Works Dept, and more).

• Government agencies to partially release

guarantees, to the extent contracts are

partially completed.

• Registration and completion timelines

extended by up to six months for all

registered real estate projects.

• Concurrent extension of various

statutory compliances under real estate

regulatory authority (RERA).

Insolvency and Bankruptcy Code (IBC)

• The threshold of default under section 4 of

the IBC has been increased from INR

100,000 to INR 10 million with the intention

to prevent triggering of insolvency

proceedings against MSMEs.

• Fresh admission of Insolvency cases for

default arising after March 25, 2020, under

IBC, 2016 suspended for six months

(extendable by another six months) in an effort

to stop companies at large from being forced

into insolvency proceedings in such force

majeure causes of default.

• Loans for COVID-19 excluded from the definition

of default.

of15

Industries Impacted

Elements Details

Industries Allowed to Operate

Essential and Reopened Services*

● Grocery stores, supermarkets, and milk shops

● Pharmacies

● Doctors’ clinics

● Emergency services

● Barbershops and hair salons

● Religious places—with a limited capacity

● Some malls and retail outlets

● Restaurants—very few have opened for

dine-in services (in cities and states with a less

severe pandemic situations), while most have

opened for takeaway/delivery services

● Workplaces (offices)— expected to run with

50% or less capacity

● IT communication centres—with limited

capacity

● Information and broadcast services

● Electric, power, and water services

Other:

● E-commerce industry

● Pharmaceutical industry

*Essential and reopened services vary from state to

state. This list makes up some common essential and

reopened services across India.

(Gupta 2020) (Sannith 2020)

Industries Severely Affected

Automotive Industry:

● Maruti Suzuki India, the country’s largest

carmaker, reported a 53.8% year-on-year

decline in domestic passenger vehicle sales

● Another automobile company saw a 26% dip

in its June sales

● Analysts expect India’s automotive industry to

decline by at least 25% in all categories in

2020

● Almost all manufacturers reported an 80 to

90% dip in domestic sales in May

Tourism and Travel Industry:

● Analysts have estimated a loss of INR 10

trillion for the industry

● The Indian Association of Tour Operators

(IATO) estimates the hotel, aviation, and travel

sector together may suffer a loss of around

INR 85 billion

of15

● The aviation industry in India incurred losses

worth INR 270 billion in the first quarter of 2020-

21

● The passenger growth of airlines is likely to fall

by 20-25% for FY 2020-21

● During April-June 2020, the tourism industry

saw a revenue loss of INR 69.4 billion,

denoting a year-on-year loss of 30%

● Most hotels are seeing 15% or less occupancy

Industries Severely Affected

(continued)

Restaurant Industry:

● Online orders have declined to 50-70% before

the pandemic

● The National Restaurant Association of India

says that about 2 million people in India’s

restaurant industry are at risk of losing jobs

● The restaurant sector has seen a 90% decline

in sales since the lockdown

● Most restaurants are operating at 50% or less

capacity

● Only 10-15% of restaurants had reopened,

and around 20-30% of these restaurants are

expected to close again

● Analysts expect 30% of the industry to shut

down permanently if the severity of the

pandemic does not improve

Retail Industry:

● Malls witnessed a 77% decline while high

street retail showed a decline of 61% in

business in the first half of June

● In March, retail companies earned zero

revenue after the lockdown was announced

Other:

● Textile industry

● Sports and leisure

● Construction industry

● Manufacturing industry

● Transportation

● IT industry

● Industrial equipment

● Real estate

(Singh 2020) (Majumder 2020) (Krishna 2020) (Wood

2020) (Singh 2020) (Goswami 2020) ( Bundhun 2020)

(Variyar 2020) (Balram 2020)

of15

Works Cited

Aggarwal, Manish. “India: Measures in Response to COVID-19.” KPMG, KPMG, 13 Apr. 2020,

home.kpmg/xx/en/home/insights/2020/04/india-government-and-institution-measures-in-re

sponse-to-covid.html.

Balram, Smita. “Covid-19 Impact: Top Retailers Urge Government to Open Non-Essential Retail

to Reset the Indian Economy - ET Retail.” ETRetail.com, 22 Apr. 2020,

retail.economictimes.indiatimes.com/news/industry/covid-19-impact-top-retailers-urge-gove

rnment-to-open-non-essential-retail-to-reset-the-indian-economy/75295813.

Bundhun, Rebecca. “India's Restaurants Are Struggling as Pandemic Scare Keeps Customers

Away.” The National, The National, 22 June 2020,

www.thenational.ae/business/economy/india-s-restaurants-are-struggling-as-pandemic-sca re-

keeps-customers-away-1.1036400.

Bureau, Zee Media. “Unlock 2 Begins July 1: Here's What's Allowed and What's Not.” Zee News,

Zee News, 1 July 2020,

zeenews.india.com/india/unlock-2-begins-july-1-heres-whats-allowed-and-whats-not-22929

29.html.

Desk, The Hindu Net. “Coronavirus India Lockdown Day 98 Updates: June 30, 2020.” The Hindu,

The Hindu, 30 June 2020,

www.thehindu.com/news/national/india-coronavirus-lockdown-june-30-2020-live-updates/a

rticle31950742.ece.

Goswami, Arindam. “Impact Of COVID-19 On Tourism In India.” BW Businessworld, BW

Businessworld, 16 June 2020,

www.businessworld.in/article/Impact-Of-COVID-19-On-Tourism-In-India/16-06-2020-28611

4/.

Gupta, Abhinav. “Unlock 2.0 or Lockdown 6.0? How States Are Making Choices amid Fears of

of15

COVID-19 Spread in Monsoon.” Jagran English, 29 June 2020,

english.jagran.com/india/unlock-20-lockdown-60-delhi-uttar-pradesh-maharashtra-mumbai-

restrictions-containment-zones-relaxations-schools-colleges-flights-trains-metro-train-covid

-19-coronavirus-july1-10013328.

Gupta, Saurabh, and Vaibhav Tiwari. “Full Lockdown In Pune From July 13-23, Essential Services

To Be Allowed.” NDTV.com, 10 July 2020,

www.ndtv.com/india-news/full-lockdown-in-pune-pimpri-chinchwad-in-maharashtra-from-jul y-

13-23-essential-services-to-be-allowed-2260589.

IMF Editors. “Policy Responses to COVID19: India.” IMF, 8 July 2020,

www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#I.

Krishna, Vishal. “India's Automobile Industry Gears up for Digitisation after Coronavirus

Roadblock.” YourStory.com, 7 June 2020,

yourstory.com/2020/06/india-automobile-industry-digitisatisation-coronavirus.

Majumder, Arindam. “Riding out the Covid-19 Crisis: Auto Shows Pick-up Signs in Rural India.”

Business Standard, Business-Standard, 1 July 2020,

www.business-standard.com/article/automobile/riding-out-the-covid-19-crisis-auto-shows-p ick-

up-signs-in-rural-india-120070200039_1.html.

Niazi, Shuriah. “India to Extend 5th Lockdown Phase amid Coronavirus.” Anadolu Ajansı, 31 May

2020,

www.aa.com.tr/en/asia-pacific/india-to-extend-5th-lockdown-phase-amid-coronavirus-/185

9380.

Parekh, Himanshu. “India: Tax Developments in Response to COVID-19.” KPMG, KPMG, 23

Apr. 2020,

home.kpmg/xx/en/home/insights/2020/04/india-tax-developments-in-response-to-covid-19.

html.

Sannith, Jude. “In Pictures: Chennai Gets Back to Work as 'Complete' Lockdown Ends.”

of15

cnbctv18.Com, 7 July 2020,

www.cnbctv18.com/photos/india/in-pictures-chennai-gets-back-to-work-as-complete-lockd

own-ends-6273121-2.htm.

Singh, Nidhi. “The Impact of Covid-19 on Travel & Tourism Industry in India and Its Future.”

Tour My India, 30 Apr. 2020,

www.tourmyindia.com/blog/impact-of-covid-19-on-travel-tourism-industry/.

Singh, Sandeep. “Explained: What Is Fuelling the Auto Sector Recovery in India?” The Indian

Express, 2 July 2020,

indianexpress.com/article/explained/explained-what-is-fuelling-the-auto-sector-recovery-in-

india-6486873/.

Variyar, Mugdha. “COVID-19 Impact: Poor Response Forces Restaurants, Hotels to Close Again;

30% Could Shut Permanently, Warns Industry.” cnbctv18.Com, cnbctv18.Com, 22 June

2020,

www.cnbctv18.com/hospitality/covid-19-impact-poor-response-forces-restaurants-hotels-to

-close-again-30-could-shut-permanently-warns-industry-6181641.htm.

Wood, Laura. “Impact of COVID-19 on the Payments Sector in India - A Comparison Between

Pre- & Revised COVID-19 Forecasts of Total Payment Card, Debit Card, and Credit &

Charge Card Transactions - ResearchAndMarkets.com.” Business Wire, 2 July 2020,

www.businesswire.com/news/home/20200702005194/en/Impact-COVID-19-Payments-Se

ctor-India---Comparison

Rubix Data Sciences Pvt. Ltd.

D-424NeelkanthBusinessPark

Vidyavihar(W),Mumbai–400086,India

Phone:+91-22-49744274

Email:[email protected]

Website:www.rubixdatasciences.com

Copyright © 2020 Rubix. All rights reserved.

India - Covid19 Factsheet-compressed (1)

Documents

Transcript of India - Covid19 Factsheet-compressed (1)