Varying climatic conditions and changing patterns are making India susceptible to disasters, be it natural or man-made. Floods, cyclones, landslides, and earthquakes, among others, are some of the natural disasters that beset the country from time to time, while unforeseen events such as accidents and now, the global pandemic COVID-19 take place, resulting in loss of lives and huge humanitarian impact.
The approach towards disaster management has changed to that of a collaborative and proactive one, thereby enabling holistic management. These disasters impact all sectors of socio-economic life, including the corporate sector, inflicting heavy economic losses, as well as property and lives. Hence, focussed attention has been given to risk mitigation to systematically reduce the vulnerabilities. Corporates in every country play a pivotal role in disaster relief, rehabilitation and recovery efforts in the affected areas.
With a direct membership of over 9,000 enterprises, CII has been leading many national disaster management initiatives. CII was the first industry organisation to form a Disaster Management Committee in May 2001 in the aftermath of the earthquake in Bhuj, Gujarat, to advise its member industries in planning and initiating disaster risk reduction steps to protect them from natural and man-made disasters. Currently, CII’s Disaster Management Division works towards involving the Indian industry in schemes under the National Disaster Management Plan.
The CII Foundation was set up in 2011 to instil inclusive development in the country through various developmental and charitable activities. These include community support and rehabilitation work along with skill development and livelihood projects, establishing health and education facilities and generation of environmental awareness in the eco-sensitive zones.
CII has undertaken extensive relief, rehabilitation and reconstruction work following the tsunami in 2004, Odisha cyclone, floods in Jammu & Kashmir and Kerala, and other calamities. Adopting villages and helping in restoring social and community assets, it has stayed connected with affected communities with a view to rebuilding livelihoods and provide support in rehabilitation.
The recent outbreak of Coronavirus, a global pandemic, has once again mobilised CII into action to alleviate suffering and loss. To temper the speed of the spread of the Coronavirus, the entire nation has been in lockdown since 25th March, 2020. This has had an enormous impact on the economy.
CII has worked on multiple fronts in the wake of this disaster. To restart the economy in a safe and calibrated manner, CII provided policy inputs and made recommendations regarding support for industry. It put together coalitions for manufacturing of ventilators, masks and personal protective equipment, facilitating production of 60,000 masks and 40,000 PPE a day and almost 16,000 ventilators by more than 70 manufacturers.
The CII Foundation, partner organisation Young Indians (Yi) and affiliated associations SIAM and ACMA are providing relief and rehabilitation across 28 states in India. As on 25th May, over 77 lakh people have directly benefitted from the measures, and 65 lakh protective & hygiene materials (1.35 lakh PPEs, 22.95 lakh masks, 12.65 lakh gloves, and 28 lakh sanitizers/soaps ) have been distributed. Community kitchens have been set up across many cities and distribution of cooked food and dry ration kits is being undertaken on a regular basis.
The organisation has started a COVID fund to provide immediate relief to vulnerable communities, including economic challenges faced by these sections. It has also actively supported various government departments, healthcare workers, and front line workers in their relief efforts.
The most recent natural disaster, Amphan Cyclone, ravaged Kolkata and other parts of West Bengal on 20th May, 2020. CII formed a task force to work closely with the State government and mobilised relief work in the affected areas. It has helped in distributing urgent requirements like food items, personal hygiene products, solar lanterns, tarpaulins, polymer roofing sheets, polymer water tanks etc.
Natural as well as man-made disasters leave a tremendous social, human and developmental impact on industrial growth, stability and prosperity in the affected regions. CII has been directing industry efforts to build resilience in the community and encourage adoption & integration of disaster risk reduction good practices and mitigation measures.
Director General, CII
FM’s announcements added up to a prudent combination of stimulus and reforms. A well thought out package was presented aimed at addressing the short-term challenges, medium-term support to business and enterprises coupled with significant policy reforms, likely to act as a catalyst for economic recovery. The comprehensive and structured package reflects the five fundamental principles laid out by the PM; infrastructure, technology-driven, demography and demand that will make India an Atma Nirbhar or self-reliant nation.
To address the immediate distress in the short-term, cash and food support is being provided via PMGKY, while more money is being put in the hands of people through tax concessions and EPF support. Immediate regulatory relief was also provided to avoid defaults on account of lockdown via relaxation in tax deadlines as well as suspension of fresh activities and exclusion of Covid-19 related debt from IBC proceedings.
Agricultural reforms and initiatives were taken up to unshackle the sector from many outdated laws. Amendments, such as the Essential Commodities Act, has been a long pending expectation, as it acted as a barrier in price realisation. Together with agricultural marketing reforms and strengthening of agri-infrastructure will lead to improved agricultural output and better pricing for farmers.
Mining is of critical importance, and the sector has been deprived of major investments. CII had been requesting for commercial mining of coal and liberalising the captive mining policy, both extremely important to improve efficiency and viability. Incentivising coal gasification is the right step to use the existing coal resources while taking care of the environment. Introduction of reforms in the mining sector through seamless comprehensive exploration-cum-mining-cum-production policy will help build certainty in investment and attract global mining companies.
Upgradation of industrial infrastructure and ranking of states in terms of investment attractiveness, among other measures would go a long way in facilitating investors. Global investors need handholding and guidance. A portal, providing information on ready to invest land would be useful. A bailout of the beleaguered state power discoms will ensure that their accumulated debt is wiped out. Reforms in tariff policy will pave the way for a more viable power sector.
In view of the heightened stress, which the MSMEs are facing due to prolonged lockdowns, we are heartened by the fact that the stimulus package included several measures. A significant measure, which is expected to alleviate the cash flow problems is the move to extend Rs 3 lakh crore collateral-free automatic loans with 100% government credit guarantee. Moreover, the decision of the government to reduce all pending dues to MSMEs within 45 days is a considerable positive for the cash starved entities and has been a long-standing demand for industry. However, we urge the government to have a re-look at the proposed turnover thresholds in the redefinition of the MSMEs as these are deemed to be too low, hence, will not encourage these entities to grow.
Other critical components include those related to public health, PSEs, defence, real estate and construction. The announcements made in April on cash transfers were further supplemented by food distribution. The allocation on MNREGA has also been increased. Industry is confident that the entire package as it is implemented will drive a gradual recovery. The rental housing scheme for migrant workers could lead to meaningful change in their condition in the long-term.
If reforms are carried out in a time-bound manner, they would have a significant impact on the economy’s competitiveness, with wide-ranging implications for each sector. The economy, when it recovers, will be a stronger and more competitive. In addition, the stimulus of Rs 20 lakh crore, as it gets spent, will have a multiplier impact. To the credit of the government and the policymakers, they have managed to achieve this without putting an excessive burden on the government coffers with the estimated deficit impact in FY21 likely to remain under Rs 3 lakh crore, which leaves additional room for contingency measures in the future, should the need arise.
This article was first published in The Financial Express on May 27, 2020
Director General, CII
Over the past few days, finance minister Nirmala Sitharaman has unveiled a slew of measures that would help the Indian economy battle and recover from the adverse impact of the coronavirus crisis. With its focus on promoting “Atma Nirbhar Bharat”, transformational and structural reforms have been introduced across several key areas, which will be instrumental in rebuilding the Indian economy and paving the way for a sustained economic revival.
First, radical reforms in the agricultural sector, such as the amendment of the Essential Commodities Act (ECA), contract farming, and inter-state sale of produce are long-awaited policies for transforming the way farmers sell their produce. This represents the freeing up of the agricultural market, much in the same way that industry was delicensed after 1991.
Deregulation of agricultural commodities such as cereals, edible oils, onions, pulses, etc adds to this effort and brings in stability in contractual obligations along with better price realisation for farmers. The formulation of a Central law on agricultural marketing will help in barrier-free inter-state trade and enable farmers to sell their produce at more attractive prices. This will also encourage e-trading of agricultural produce and ensure levelling of prices for consumers across the country.
The creation of a facilitative legal framework to bring farmers in contact with food processors, aggregators, large retailers and exporters in a fair and transparent manner, and provide them with assured produce, price and quantity is another commendable step. A contract farming mechanism will guarantee better predictability of price and produce, with better signalling on the next year’s planting plans. The action of state governments will be central to the success of the agricultural package, and we believe that given its benefits as well as the current crisis situation, the states would partner in this mission.
Two, redefinition of the micro, medium and small enterprises (MSMEs) with revision of investment limits for the first time after 2006 with an additional turnover criterion results in two critical benefits. It brings in a large number of enterprises into the MSME benefits fold, and it encourages smaller enterprises to grow without anxiety about losing these benefits. Given that MSME are the chief employers and it is their growth that creates fresh job opportunities, this is indeed a strategic policy. We hope that this can be implemented at the earliest.
Three, a new Public Sector Enterprises (PSE) policy is to be announced, wherein all sectors will be open to private sector participation while PSEs will continue to play an important role in notified strategic sectors. As per Ms Sitharaman’s presentation, all PSEs in non-strategic sectors will be considered for privatisation, which is truly a game-changing reform.
A coherent PSE policy will play a catalytic role in promoting efficiency and better resource allocation by reducing wasteful administrative costs. Further, it will add to the government’s revenues. While the government might make more gains in waiting for equity markets to improve before placing PSEs on the block, it is suggested that the implementation is carried out at the earliest so that efficiency and resource use gains can be unlocked quickly.
Four, the government has taken key steps to revitalise the power sector, now suffering from huge debt overhang in state distribution companies. The facility of Rs 90,000 crores from PFC and REC would help to alleviate this. Further, it is notable that discoms’ reform has been linked to the enhancement in the states’ borrowing limits. Reforms in the power tariff policy would avert such situations in the future, and this promises to also address the issue of cross-subsidisation of power tariffs, which is adding considerably to costs for manufacturing companies.
Five, the liberalisation of the coal and mining sectors are major reforms that would boost India’s fuel production and attract greater foreign investments. Introduction of commercial mining on a revenue sharing basis in the coal sector will help to leverage India’s coal resources better and end the monopoly situation prevailing in this sector. Apart from greater availability of coal at market prices, technology and safety will also benefit in India’s mines.
This move has been accompanied strategically by the allocation of Rs 50,000 crores for coal evacuation infrastructure to encourage private sector participation. Another major reform is a seamless composite exploration-cum-mining production regime, which promises to remove the hurdle currently facing prospective investors. Joint auction of bauxite and coal will unlock huge potential in making India a leader in the global the aluminum industry as well.
Six, the foreign direct investment (FDI) limit in defence manufacturing was raised from 49 per cent to 74 per cent through the automatic route. While encouraging greater investments from global defence majors, greater infusion of technology in the sector will give a major boost to India’s defence manufacturing.
These reform measures address key pain points of the economy and will contribute towards enhancing its global competitiveness at a time when the world stands at a critical turning point.
This article was first published in The Deccan Chronicle on May 22, 2020
Director General, CII
The announcements made by the Finance Minister for five days consecutively, added up to a prudent combination of stimulus and reforms. A well thought out package was presented aimed at addressing the short-term challenges posed due to COVID-19 induced crisis, medium term support to business and enterprises coupled with significant policy reforms which is likely to act as a catalyst for economic recovery post the lockdown period. To address the immediate distress in the short term, cash and food support is being provided through Pradhan Mantri Garib Kalyan Yojana (PMGKY) while more money is being put in the hands of people though tax concessions and EPF support to public and enterprises. Immediate regulatory relief was also provided both to individuals and enterprises to avoid defaults on account of lockdown through relaxation in tax deadlines as well as suspension of fresh activities and exclusion of COVID-19 related debt from IBC proceedings.
Agricultural reforms and initiatives were taken up very strongly by the Finance Minister, unshackling the sector from many outdated laws. Amendment of legislation such as Essential Commodities Act has been a long pending expectation of the stakeholders in the sector, as it this acts as a barrier in the process of price realisation. This together with agricultural marketing reforms and strengthening of agri-infrastructure with a fund of Rs 1 lakh crore will lead to improved agricultural output and better pricing for farmers.
Mining is of critical importance and the sector has been deprived of major investments. CII had been requesting for commercial mining of coal and liberalising the captive mining policy which were both extremely important for improving the efficiency and viability of the mining and metals sectors. Incentivising coal gasification is the right step to use the existing Coal resources while taking care of the environment to which India has global commitments. Introduction of reforms in the mining sector through seamless comprehensive exploration cum mining cum production policy will help build certainty in investment and attract global mining companies to India.
Upgradation of industrial infrastructure and ranking of states in terms of investment attractiveness, among other measures would go a long way in facilitating investors. Global investors looking to invest in India need handholding and guidance on where the best facilities are available. A portal providing information on ready to invest land in industrial estates and parks would be very useful for such guidance. A bailout of the beleaguered state power distribution companies will ensure that their accumulated debt is wiped out. Reforms in tariff policy will pave the way for a more viable power sector.
In view of the heightened stress which the MSMEs are facing due to prolonged lockdowns, we are heartened by the fact that the stimulus package included several measures to help the beleaguered sector. A significant measure which is expected to alleviate the cash flow problems being faced by the MSMEs currently, is the move to extend Rs 3 lakh crore collateral-free automatic loans with 100% government credit guarantee. Moreover, the decision of the government to reduce all pending dues to MSMEs within 45 days is a considerable positive for the cash starved entities and has been long-standing demand for industry. However, we urge the government to have a re-look at the proposed turnover thresholds in the redefinition of the MSMEs as these are deemed to be too low, hence will not encourage these entities to grow.
Other critical components of the package include those related to public health, public sector entities, defence, real estate and construction. The announcements made in April on cash transfers were further supplemented by food distribution to the people at the bottom of the pyramid who are facing distress. The allocation on MNREGA has also been increased so that migrants returning to the rural areas are able to find a livelihood. Industry is confident that the entire package as it is implemented will drive a gradual economic recovery. The announcement of a rental housing scheme for migrant workers would could lead to meaningful change in their condition in the long-term.
Many of the structural reforms have been industry asks for some time and if carried out in a time-bound manner, would have a significant impact on the economy's competitiveness, with wide-ranging implications for each of the sectors under consideration. The economy, when it recovers, will be a stronger and more competitive one. In addition, the stimulus of Rs 20 lakh crore, as it gets spent will have a multiplier impact on the economy. To the credit of the government and the policy makers, they have managed to achieve this without putting excessive burden on the government coffers with estimated deficit impact in FY 2020-21 likely to remain under Rs 3 Lakh Crore, which leaves additional room for contingency measures in the future, should the need arise.
This article was first published in The Morning India on May 19, 2020
Director General, CII
Covid-19 has altered the entire economic paradigm like no other event. The global economic fallout is worsening by the day and countries across the world are grappling with the economic challenges. The ensuing battle against Covid-19 is expected to be a long-drawn one and its attendant economic costs will be humongous. At a time when the economy was showing incipient signs of recovery, the outbreak of the pandemic has come as a bolt from the blue. While the lockdown was necessary to save precious lives, it has had serious economic consequences. By the time the third phase of the lockdown ends, we would have lost almost two months of output.
The incoming high-frequency data that is trickling in has started to show the stress on the macros. The Purchasing Managers’ Index (PMI) slumped to a record low of 27.4 in April from 51.8 in March, driven by sharp falls in new orders, output and employment indices. Manifesting the collapse in service sector activities, PMI services index, too, plummeted to 5.4 in April, an unprecedented low since the start of the survey. Industrial output also mirrored the stress as it contracted by a large clip, 16.7%, in March. Merchandise exports contracted by a record 34.6% that month as the virus wiped out global appetite for trade coupled with disrupted supply lines. These are ominous signs for the economy and only the beginning of what we believe would be a protracted period of slowdown.
Unsurprisingly, the growth forecasts for the current fiscal have been scaled down sharply, with most expecting de-growth, even in their bestcase scenarios. Among the biggest casualties of the lockdown have been the daily-wage workers, who account for almost a third of the country’s total workers. With factories shutting shops, these workers have been rendered jobless. The International Labour Organization has forewarned that 400 million Indians, including migrant workers and dailywage earners, are at risk of being pushed deeper into poverty due to widespread joblessness. Another disturbing factor pertains to the lack of a social security net for the tens of millions of workers in the unorganised sector, which makes them vulnerable to the vagaries of a grinding halt in economic activities.
Taking cognisance of the very dire economic circumstances that we find ourselves in due to Covid-19, the announcement of the `20 lakh crore special ‘Atma Nirbhar Bharat Abhiyan’ package, which is roughly equivalent to 10% of GDP, by the prime minister was the need of the hour. Apart from providing the financial wherewithal to navigate out of the crisis, the thrust of the package is also on ensuring that India becomes self-reliant.
Rightfully, the focus of the first tranche of the package announced on May 13 was on the key sectors of MSME, employee provident fund, power distribution companies and taxation, among other major areas that are the most impacted. The six measures announced to alleviate the stress of the MSME sector, especially the provision of collateral-free automatic loans with 100% government credit guarantee and change in definition of MSMES, are expected to be a major shot-in-the-arm for the beleaguered sector. Both these measures were something that the CII has been very strongly advocating with the government for long.
The large allocation made for the guarantee will assure banks that the government will repay them in case the loans are not repaid by the borrower. As banks increase their credit, the economy could turn around and the actual default rate could come down. The guarantee will be a contingent liability for the government, not requiring any immediate spending.
It is heartening to note that the bouquet of announcements laid special emphasis on rejuvenating the infrastructure and construction sector for bringing growth back to the economy. Specifically, the `90,000 crore liquidity infusion into the power distribution companies (Discoms) is expected to help revive this critical sector, which has been accumulating huge losses, as the tariffs are not set on a commercial basis. It is hoped that the forthcoming packages to be announced in the coming days will supplement the well-calibrated and prudent measures announced in the first tranche.
These measures and the ones that will follow are expected to provide support for growth in the short term. However, in line with the necessity for implementing bold reforms that the prime minister spoke about, a medium-term plan for recovery, implementable over a period of time, too is the need of the hour. Funding public infrastructure has been a proven route of stimulus that not only generates demand for many industries but also creates jobs, especially for a large section of informal workforce. In this regard, a public works programme on the lines of the already announced National Infrastructure Pipeline should be initiated with the involvement of state governments so that implementation bottlenecks can be overcome. The suggested areas could include roads, railways, ports and industrial parks.
Finally, the pandemic should serve as a reminder that it is critical to build on our health infrastructure. At present, our healthcare spending at 1.29% of GDP remains abysmally low as compared to our peers in the BRICS and OECD countries. The government needs to urgently prioritise healthcare spending to brace itself for facing any eventuality of the present kind in the future.
This article was first published in The New Indian Express on May 15, 2020
Director General, CII
The Narendra Modi government’s decision to impose one of the strictest lockdowns worldwide, which has now been operational for close to 50 days, has augured well to flatten the curve on casualties in India, but it is bound to have some serious implications for the economy. The jury on the debate over lives and livelihoods is still out in the open, but urgent action will now need to be taken to get the economy back to a safe and sustainable start.
With the nationwide lockdown further extended till May 17, though with considerable relaxations in the orange and green zones, industry is now trying to find its way around the new normal. This is because, despite these relaxations, it will take a while to put in place the requisite checks and balances for getting full capacity on board. Add to that, industry is also facing a major challenge with respect to the availability of workers to recommence their operations.
These sentiments were echoed by more than 100 top industry leaders in a survey conducted during the special meeting of members of the CII national council 2019-20 held recently. Most of the CEOs (around 90 per cent) predict a fall in GDP growth in 2020-21. Of this, a large proportion of the respondents (38 per cent) anticipate that the fall in growth will lie in the range of minus one to minus two per cent; while 36 per cent feel it will fall even below minus two per cent. This spells out the urgent need for a fiscal stimulus package from the government, one which will herald a sharp recovery from the current abyss.
With companies shutting shop as a result of the lockdown across the country, predictably, the corporate performance outlook for the current financial year looks bleak, according to the CII’s survey results. A major proportion of respondents (32 per cent) expect their topline to contract in a range of 15-30 per cent, closely followed by an almost similar proportion of respondents (30 per cent) who foresee a 0 to 15 per cent contraction, confirming the slowdown in the economy. Immediate measures are therefore required to give some relief to help the corporate sector recoup some of its lost ground.
It has been suggested that all industrial units, including in non-notified industrial areas and standalone units, be allowed to function in urban areas. In addition, the issues related to the availability of the workforce at factory sites also need to be streamlined and resolved with the utmost urgency to enable industries to resume operations. To alleviate their liquidity stress, we suggest that the banking system could step in by providing additional working capital limits, equivalent to the April-June wage bill of the borrowers, backed by a government guarantee, at 4-5 per cent interest.
The Covid-19 pandemic has induced a big external shock as well, with two of India’s biggest export markets – the European Union and the United States -- having seen extended period of lockdowns. This could inflict a further body blow to the companies which are already struggling with insipid demand conditions domestically. The survey results spell out the concerns of respondents, with nearly half of them (49 per cent) expecting exports to contract in the range of 0-15 per cent in the current fiscal. This will be especially detrimental to the prospects of companies that depend considerably on foreign trade. To alleviate their stress, as an immediate measure, exports should be classified under essential services so that they can operate with free movement of cargo across states. In addition, the interest subvention scheme currently available for MSME exporters could be extended immediately, apart from broadening its scope to include all exporters.
A significant majority of respondents (81 per cent) have indicated that they have faced problems in credit offtake from banks and NBFCs. To help banks tide over their risk aversion and lend to productive sectors of the economy, it is suggested that banks be assured of a government backstop either in terms of recapitalisation or a government guarantee on loans.
The other issue which the survey highlighted has been with respect to the anticipated job losses. A large proportion of respondents (39 per cent) expect a 10-20 per cent cut in jobs, closely followed by 32 per cent of the respondents who foresee a less severe 0-10 per cent decline in jobs.
For starters, it is important that labour-intensive sectors such as manufacturing and construction are accorded priority in any policy framework being worked out to fight the slowdown induced by the pandemic. This is crucial since any losses in jobs and livelihoods are likely to have dire implications on the level of poverty and hunger and reverse many of the gains made by the country in all these areas.
Given the precarious state of the economy and the impact on livelihoods, it is important the government steps in urgently with a comprehensive package that addresses the issues of MSMEs, stressed sectors, liquidity and the common man.
This article was first published in The Asian Age and Deccan Chronicle on May 13, 2020
The Prime Minister has delivered a visionary statement that truly captures the needs of the nation at this critical hour during the Coronavirus pandemic. He has promised a package of Rs 20 lakh crores which would be delivered to stressed sections of society, farmers, workers, and MSME. We truly appreciate his emphasis on strengthening MSME which support millions of jobs as well as his emphasis on competitiveness of Indian industry. Global supply chains, agriculture and agri supply chains, and local supply chains all found mention in this very important statement from the Prime Minister. Workers in organised and unorganised sectors can both be expected to receive benefits in the coming days.
We appreciate that the Prime Minister spoke about the areas of land, labour, liquidity and simplification of laws which are the key challenges of the economy. Reforms in these four areas will truly unleash the next wave of economic growth within this crisis situation. The Prime Minister’s high emphasis on self-reliance and strengthening India’s domestic manufacturing is indeed welcome. He has rightly identified the five pillars of the economy as quantum jump of the economy, world-class infrastructure, technology processes, demography and strong domestic demand.
CII welcomes the statement and looks forward to the policy announcements to be made over the next few days by the Finance Minister.
- Vikram Kirloskar
The Confederation of Indian Industry (CII) has recommended direct cash transfers of Rs 2.0 lakh crore to the Jan Dhan accounts of the poor to help them tide over this crisis. This should be done in addition to Rs 1.7 lakh crore stimulus already announced. It should be ensured that migrant labourers receive money in their accounts so that they are encouraged to return to the workforce.
Businesses are dealing with a cash flow crunch, and it is difficult to lend wage support to workers. To avoid job losses, enterprises need immediate support. CII has recommended a provision of Rs 2 lakh crore for additional working capital to help enterprises in meeting wage requirements and interest payments for the next three months. Banks should provide enhanced limits, equivalent to April - June wage bill of the businesses, backed by a Government guarantee, at 4-5 per cent interest, with a refinance guarantee from RBI. A similar carve-out could be provided for the April – June interest obligations of the stressed sectors.
MSMEs are the backbone of the Indian economy and are the worst-hit sectors. CII recommends a credit protection scheme for MSMEs, whereby 60-70% of the loan should be guaranteed by the government i.e. if the borrower defaults, the government should repay the bank up to the amount it has guaranteed, so the risk to the lender is limited. The allocation for this guarantee can be kept at Rs 2 lakh crore, though this may not entirely be utilised. MSMEs also are suffering because of the delayed payments, which are in the range of Rs 6 lakh crore. The outstanding payments should be made on an urgent basis to help MSMEs sail through the crisis.
CII has also suggested the creation of a fund or SPV with a corpus of Rs 1.4-1.6 lakh Crore, which will subscribe to NCDs/Bonds of corporates rated A and above. The fund can be seeded by the Government contributing a corpus of Rs 50,000 crore, with further investments of Rs 40,000-50,000 crore from banks and the remaining Rs 50,000-60,000 crore by financial institutions. This will provide adequate liquidity to the industry, particularly the stressed sectors such as aviation, tourism, and hospitality.
Building public infrastructure could boost demand and create jobs. Rs 4 Lakh Crore could be demarcated for the purpose wherein private investors and investment funds could be roped-in to increase the size of the investment. To begin with, the fund could be utilised for pending projects that would immediately enhance productivity.
CII has sought an allocation of Rs 2 lakh crore to be earmarked for bailing out state-run electricity distribution companies that have been accumulating losses. The banks are also at a higher risk of running into an economic crisis as their current exposure to the private sector, including MSMEs, stands at Rs 29.05 lakh crore. Therefore, CII has recommended for recapitalising the banks with an allocation of Rs 2 lakh crores to manage any surge in NPAs.
CII has also provided ways to finance the stimulus package to ensure a stable macro-economic environment. It has suggested Rs 4 lakh crore support from the subscription of government paper by the RBI as a possible measure to monetise the government borrowings. An equivalent amount can be curtailed from Government expenditure bills.
Borrowings from domestic and foreign sources as well as raising revenues through disinvestments could also be considered to finance the Rs 15 lakh crore stimulus.
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