Amid widespread criticisms in the political circles that the 21-day nationwide lockdown announced by Prime Minister Narendra Modi is anything but planned, Bajaj Auto's managing director Rajiv Bajaj has become among the first industrialists to say that the lockdown will hurt the Indian economy more than ever. "I continue to believe this (lockdown) makes India weak rather than stronger in combating the epidemic. We should have kept only the vulnerable at home, closed all public spaces, and allowed the young and healthy to keep turning wheels of the economy—with due precautions, with respect to hygiene, masks, distancing, etc," the outspoken industrialist writes in an opinion piece in the Economic Times.
He goes on to explain that the current approach is totally unsustainable in the future. "Every now and then when a virus returns, are we to fear that the lockdown will also be back?" Bajaj questions.
His company, two-wheeler maker Bajaj Auto was among the first companies to suspend production due to "local instructions" on March 21. The Pune-headquartered company is still in a resilient stage and "have assured dealers, suppliers and employees, including all contract employees, that we will not permit this extreme lockdown to impact them till April 14."
However, Bajaj wonders what is in store if the lockdown gets extended. "Until we see signs of normalisation, we are reviewing our capex budget to be put on hold, marketing budget to be reduced to virtually zero, interest waiver on dealer credit to be tempered, and wages to be cut across the organisation. We are at the moment not affecting job cuts and intend to honour all supplier payments due," he says. "For, I firmly believe that we’re not going to save ourselves out of this crisis, we have to sell ourselves out of it," Bajaj warns.
The automobile sector, already reeling under the pressure of an economic slowdown for almost a year, has been one of the worst affected in the coronavirus. Initially, the productions were affected due to lack of equipment coming in from China due to shut down in that country in response to COVID-19. Later, the nationwide shutdown in India kicked in pushing the companies to suspend production.
