As fears of a global economic recession is looming large due to the coronavirus outbreak, India Inc is seeking a series of measures, including Rs 2 lakh crore relief package and measures including Direct Benefit Transfer to less privileged informal sector. “The rapidly spreading Covid-19 has derailed the global economy, increasing the chances of a global recession setting in. Policymakers around the globe are considering measures to fight the risks of a sharp slowdown by supporting businesses at this critical time,” the Confederation of India Industries (CII) said.
While India Inc is doing its bit, CII demanded a special fiscal package worth Rs 2 lakh crore. “The government may consider a strong fiscal stimulus to the extent of 1 per cent of GDP amounting to Rs 2 lakh crore to be given in the hand of the needy citizens through Aadhaar-based Direct Benefit Transfer. An amount of Rs 10,000 for each individual, especially the rural and urban poor, and Rs 10,000 for the most vulnerable section — the elderly,” CII said.
The CII added that there are roughly 20 crore casual labourers in the country. They are the most vulnerable sections and “among the first to be hit on account of an economics crisis being triggered by Covid-19”.
The CII has also asked the Central government to consider removing long-term capital gains tax, to allow GST payments on collection of bills to avoid liquidity getting locked, and to clear the pending payments to industry by the government, on a priority basis. The industry body has also suggested a series of monetary policy measures that RBI should take to ensure liquidity in the economy. It said that (Repo Rate) and Cash Reserve Ratio should be reduced by 50 basis points. RBI must change the definition for NPA to default by 180 days till September 30, it said.
Industry’s suggestions
Removal of long-term capital gains tax, allow GST payments on collection of bills to avoid liquidity getting locked
Easing pressure
CII said these measures will solve their cash flow issues, reduce insolvency risk of corporates and lift NPA pressure