Industry demands Rs 6 lakh cr stimulus package to mitigate impact of lockdown

NEW DELHI: India Inc on Friday exhorted the government to immediately announce a stimulus package to mitigate the impact of the coronavirus pandemic, asserting that the lockdown has resulted in “massive economic disruption”. The industry also welcomed the Centre’s decision to extend the lockdown for two weeks from May 4 […]

NEW DELHI: India Inc on Friday exhorted the government to immediately announce a stimulus package to mitigate the impact of the coronavirus pandemic, asserting that the lockdown has resulted in “massive economic disruption”. The industry also welcomed the Centre’s decision to extend the lockdown for two weeks from May 4 with relaxation to industrial activities in certain zones.

“With restricted economic activities, the imperative for a quick and forceful economic support package for industry is even more compelling now. CII has suggested instituting a Government spending package equivalent to 3 per cent of GDP which would add Rs 6 lakh crore to the available firepower. Enhanced debt to GDP ratio can be a way out for adding fiscal space at a time when the debt to GDP ratio is modest in India,” CII Director General Chandrajit Banerjee said.

”The government’s strategy to build on the gains in the form of containment of coronavirus is understandable and must be supported, but the 40-day lockdown has resulted into a massive economic disruption. The disruption has started causing livelihood concerns for millions of workforce – both in the formal and informal sectors,” Assocham stated.

It said businesses across different sectors, be in hospitality, construction, logistics, manufacturing and trade find themselves locked up in grave financial woes.

“Such a dire state of affairs demands a large sized fiscal stimulus even if it requires monetisation of fiscal deficit by direct lending by RBI to the government,” said Assocham Secretary General Deepak Sood.

Another industry chamber Ficci on Friday submitted its lockdown exit strategy recommendations to the Ministry of Home Affairs and called for resumption of industrial and commercial activities in green zones including within municipal districts, while maintaining protocols for sanitization and social distancing.

Ficci suggested that government services such as documentation, stamping, registering trusts, etc. be resumed or digitally validated and resumption of international courier services.

It said export routes through Land ports may to be opened and inland Waterways may be explored for both domestic and Exim cargo movement.

In order to enable economic activity to go forward, retail & wholesale businesses of both essential & non-essential goods need to start operations in Green Zones maintaining necessary protocol for sanitation and social distancing, Ficci said.

Reacting to the decision to extend the lockdown, Ficci President Sangita Reddy said while a regular assessment of the zones and activities is required to further relax the opening up of business activities, it is also now opportune time for the government to come up with the financial package, especially for the MSMEs, and for the industry as a whole.

Confederation of All India Traders Secretary General Praveen Khandelwal said that due to such a long unprecedented lockdown in the country, millions of retailers are facing severe financial issues and are on the verge of collapse.

“Even the existing inventory is unprotected and the quality is fast deteriorating. Cases of theft have also risen in unprotected and unguarded markets,” Khandelwal said.

The government on Friday announced that a “limited” lockdown, including suspension of inter-state travel, air and train services, will continue to remain in force for another two weeks throughout the country from May 4 but some activities would be allowed after classifying areas into Red, Orange and Green zones.

The government order, which announced extension of the lockdown invoking the Disaster Management Act, said a limited number of activities will remain prohibited throughout the country, irrespective of the zone.

These prohibited activities include travel by air, rail, metro and inter-state movement by road, running of schools, colleges, and other educational and training hospitality services, cinema halls, malls, gymnasiums, sports complexes.

All social, political, cultural and other kinds of gatherings and religious places or places of worship for public will also remain shut, the order said but added that movement of persons by air, rail and road is allowed for select purposes, and for purposes as permitted by MHA.

Industrial establishments in urban areas including Special Economic Zones (SEZs), Export Oriented Units (EOUs), industrial estates and industrial townships with access control have been permitted.

Construction activities in urban areas have been limited to in-situ construction (where workers are available on site and no workers are required to be brought in from outside) and construction of renewable energy projects.

Shops in urban areas, for non-essential goods, are not allowed in malls, markets and market complexes. However, all standalone (single) shops, neighbourhood (colony) shops and shops in residential complexes are permitted to remain open in urban areas, without any distinction of essential and non-essential.

E-Commerce activities in the Red Zones are permitted only in respect of essential goods. and private offices can operate with up to 33 per cent strength as per requirement, with the remaining persons working from home.

Source Article

Lois C. Ferrara

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