Bharat bandh: Assocham raises GDP loss estimate to Rs 26,000 crore

NDTV Profit Desk

21 Feb 2013, 06:23 PM IST

This estimate is higher than Assocham's initial projection of Rs 15,000-20,000 crore. "Against initial estimates of Rs 15,000-20,000 crore, the GDP may be eroded by about Rs 26,000 crore," Assocham said in a release.
Assocham president Rajkumar Dhoot said the strike is likely to aggravate the price situation because of a disruption in the supply of essential commodities.
Industrial activity was badly hit. Most industrial states saw poor worker attendance, leading to curtailing of productions shifts. With public transport being affected adversely, footfall in retail trading markets also considerably declined, even though some of them remained opened.
Public sector banks across the country remained shut. There are 26 public sector banks in India with an employee strength of over 10 lakh. Private banks were open although there were reports of some private sector bank employees too staying away from work. Operations at these banks were affected since there are no PSU banks open to pump cash into these banks. Cash at these banks was expected to run out by the evening.
From tomorrow, employees at automobile majors Maruti Suzuki India and Hero MotoCorp will stay away from work in support of the striking trade unions. "After a meeting with the management, it was agreed that tomorrow will be declared a holiday at the two plants (Gurgaon and Manesar) and workers will compensate for it by working on Sunday," Maruti Udyog Kamgar Union (MUKU) general secretary Kuldeep Jhangu said.
Narsing Rao, head of state-owned Coal India, which accounts for about 80 per cent of India's coal production, said output losses this week could touch 4 million tonnes (mt) pushing the company further away from its production target of 464 mt in this fiscal year through March.
Iron ore and coal production in the resource-rich state of Chhattisgarh has also been hit. "Trade unions leaders have forced dozens of workers to stop iron ore mining in protest against violations of labour laws and high inflation," an official at NMDC, India's biggest iron ore producer, said. By noon, the company had halted 60 per cent of production at mines in the Dantewada district, where it produces about 60,000 tonnes of iron ore a day, officials said.
The governments of states like West Bengal and Kerala, where trade unions have a strong presence, have announced "no work, no pay" over the next two days.
Flight and rail operations remained unaffected by the strike.
The country can ill afford this strike, with economic growth hurtling towards a decade-low growth. As he tries to avert a sovereign credit downgrade, Finance Minister P.Chidambaram is expected to cut the public spending target for fiscal year 2013-14 by up to 10 per cent from this year's original target in what would be the most austere budget in recent history.

With inputs from agencies