Over the last decade, there have been many events that have impacted the global economy and industries at large, however, COVID 19 has been different. It has caused a spiral effect on all industries, especially the manufacturing segment. The outbreak of the pandemic and the resultant lockdown had paralyzed the non-essential manufacturing segments like building materials also. In the building materials segment, companies faced numerous challenges like, disruption in the manufacturing process, manpower shortage due to reverse migration, growing gap between the demand and supply chain and logistical constraints.
However as economies are now opening, the sector has been on a revival path, recovering faster than expected. Despite the current challenges, the sector is poised to witness 5% to 10% growth in 2021 owing to planned infrastructural developments. However, for this positive optimism to convert, the need of the hour will be to assist the sector with financial impetus and regulatory reforms.
One of the major bottleneck that the industry has been facing is the complex policy structure. Government should introduce policies like single window clearance, uniform taxation, structured interest rates, quick implementation of schemes announced under “Atmanirbhar Bharat” programme, to make the regulatory system to be more proactive, time bound resolution of sectorial issues etc. to aid the revival of the sector. All of this will improve the overall ease of doing business in the segment and open new avenues of opportunities and cross-brand collaborations. Additionally, we must also ensure that all previously introduced reforms are implemented quickly and effectively.
Another crucial area that will need attention in 2021 is financial aid. Government should look at opening new financing channels both from regular banking routes, NBFCs and private equity. Financing alternatives should be made available for all tenures – short, medium and long term. Not just this, we need to ensure that the disbursement of Central and State government aids should be done within the stipulated timeline as then only it can be beneficial for all stakeholders.
From an immediate action point of view, the next government should take strong efforts in the upcoming budget. Considering the COVID19 Pandemic, Improving the health care infrastructure, Migrant Labour reforms, Logistics and supply chain, digitisation etc. should be taken into consideration. It should invest and fasten the infrastructure development projects. Additionally, reduction in income tax rates will increase consumer spending potential and this in turn can improve the growth prospectus of the industry.
While these reforms will help the sectors to revive faster than expected, for organizations, more strategic efforts are required to maintain positive sentiment amongst employees during the current times. Companies will have to not just adapt the new ways of work, they will have to be equally agile to what the future awaits. Pandemic has taught many traditional industries like manufacturing, specifically Building Materials to be accustom to innovative and flexible ways of working and these learning are paving the way for the future of work.