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- 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. |
| 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. |
| India has entered the third phase of lockdown from May 4, 2020, with relaxed norms for industrial activities that come with necessary riders to contain the spread. The Confederation of Indian Industry (CII) is working to mitigate the economic impact to save businesses from the catastrophe and safeguard livelihoods of millions. It recently conducted a CEO Snap Poll to assess the impact of COVID-19 on the economy and industry. The survey saw the participation of more than 300 CEOs, of which nearly two-thirds belonged to MSMEs |
| With each passing day, the economic impact of the lockdown across sectors is getting more pressing, calling for an immediate, across the board intervention from the government. Under lockdown, economic activity has slowed down across most sectors. In manufacturing, only food processing, pharmaceuticals and medical equipment are operational, while construction and mining activities have halted completely. |
| In a paper titled ‘A plan for economic recovery’, CII has laid out its growth expectation under three scenarios. In the baseline scenario, GDP is expected to grow at just 0.6 per cent on an annual basis as economic activity is expected to remain constrained due to continuing restrictions on the free movement of goods and people beyond the lockdown period. |
| But if there is a more prolonged outbreak, where the restrictions in existing hot-spot regions get extended, while new regions are identified as ‘hot-spots’ leading to intermittent stop and start in economic activity, GDP is likely to decline by -0.9 per cent. CII has suggested urgent fiscal interventions to tackle the situation, and recommended cash transfers amounting to Rs 2 lakh crore to JAM account holders, in addition to the Rs 1.7 lakh stimulus already announced. |
| For MSMEs, CII has suggested a credit protection scheme whereby 75-80% of the loan should be guaranteed by RBI, i.e. if the borrower defaults, RBI should buy the loan and repay the bank upto 75-80% of the loan, so the risk to the lender is limited. SIDBI could provide the guarantee for loans to industry and trade while NABARD could provide the guarantee for loans to agro-processing sectors. |
| For industry/industrial establishments, permission was granted for those in rural areas; manufacturing establishments, food processing industries, coal production, mines and mineral production, transportation, jute industries, oil and gas exploration, refinery, brick kilns in rural areas and construction activity in rural areas and within municipal areas where workers are on site. |
| Movement of select people was also permitted. Prohibited till 3 May are travel, buses and metro rail services, taxis, cab services, all educational coaching and training institutes, all industrial and commercial activities other than those permitted, all hospitality services, cinema halls, malls, gyms, entertainment parks, theatres, bars, auditoriums and similar places, all religious places, places of worship and all gatherings. |
Confederation of Indian Industry - COVID 19 Action Group
April 2021
June 2020
May 2020
April 2020
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