Call Us Now

+91 9606900005 / 04

For Enquiry

legacyiasacademy@gmail.com

FUEL SALES, CRISIL FY21 GDP GROWTH FORECAST, RETAILERS, REAL ESTATE SECTOR TO SUFFER AMID COVID19 ALERT

Why in news?

  • Sales of sensitive petroleum products such as petrol and diesel have dropped in March compared with February as more people stay back at home to prevent COVID-19 from spreading.
  • Crisil has cut India’s GDP growth rate forecast for FY21 citing financial sector stress and COVID-19 impact.
  • Organised retailers, dealing with non-essential daily use items, are struggling to keep their business operations on, even as State governments are coming out with new regulations to curb the spread of COVID-19 in the country.
  • The spread of COVID-19 in India and the resultant restrictions imposed by government authorities to contain it is expected to impact the real estate sector significantly, say developers and analysts.

Drop in Fuel Sales

  • The fall in the sales of sensitive petroleum products was sharper in the second week of March and is likely to fall at a faster rate in the weeks coming ahead as more and more people are staying back at home to avoid getting affected by the virus.
  • The decline in sales comes even as prices of petrol had fallen by over Rs. 6 a litre and diesel by about Rs. 7 a litre since January 2020 on the back of plummeting global crude oil prices.
  • Aviation business has been more impacted on falling Aviation turbine fuel (ATF) sales as it services more international flights, which witnessed higher cancellations in March.

India’s GDP Growth Rate Forecast

  • Crisil has cut its base-case GDP growth forecast for fiscal 2021 to 5.2%, from 5.7% announced recently.
  • Reasons: Domestic consumption demand may take some hit and the other downside to growth is also due to the financial sector stress now percolating to private sector banks.
  • A serious downside to the base case can emerge from two developments.
  • One: the pandemic is not contained by April-June 2020 globally, and makes the global slowdown more severe.
  • Two: it spreads rapidly in India, affecting domestic consumption, investment, and production. These would further hurt confidence and the financial markets

Retailers facing large-scale closures

  • All business establishments inside shopping malls, other than those dealing with essential items such as grocery and vegetables, have been closed.
  • Several standalone stores of organised retail chains have been closed to comply with the regulations.
  • According to retailers, authorities are not allowing stores located in densely populated areas to remain open.

Real Estate sector likely to Suffer

  • In the mid-term, it is expected that new sales will be badly impacted and there will be a surge in default by customers. This will certainly have a cascading effect on the repayment of loans availed by customers and developers.
  • People are avoiding stepping out of homes and hence there is a dip in walk-ins across all residential projects too. Investors, as well as end-users, are opting for a ‘wait and watch’ policy amid the pandemic.
  • When it comes to commercial real estate, the impact of COVID-19 in form of shutdown of retail outlets and malls as also entertainment and fitness centers has put commercial real estate deals on ‘wait and watch mode’.
Download PDF
September 2022
MTWTFSS
 1234
567891011
12131415161718
19202122232425
2627282930 
Categories