NEW DELHI: The Indian economy will need a fiscal stimulus worth Rs 3 lakh crore or up to 1.3% of the GDP along with direct cash transfers and temporary GST rate cuts to arrest the ongoing loss of business, mostly exacerbated by an existing demand slump.
Addressing his first press conference after taking over as CII President, T V Narendran, on Thursday said that the move is also necessitated for quickly restarting the flagging private investment cycle.
“The cumulative impact of the two waves on incomes and consumer sentiment, coupled with the increase in household medical expenses in the second wave, is likely to affect consumer demand for some time. As the economy reopens post the second wave, a dual-pronged Government strategy is required to boost consumption and support industry till demand is well-entrenched,” said Narendran, who is also the CEO and MD of Tata Steel.
While the government had recently expanded the scope of the emergency credit scheme in its third makeover, CII wants it extended to retail and machine tools sectors, both of which have a large number of firms.
Other suggested measures include enhanced MNREGA allocations; time bound tax relief/interest subvention/stamp duty concession for home buyers; LTC cash voucher scheme like last year; and extension of the Aatmanirbhar Bharat Rozgar Yojana till March 31, 2022. Narendran pegged GDP growth rate for FY22 at 9.5%.