NEW DELHI: The final tranche of Rs 20 lakh crore stimulus package to make India a self-reliant economy was announced on Sunday. On the final day, Finance Minister Nirmala Sitharaman and Team announced reforms in Health and Education sector, increasing allocation in MGNREGA, gave emphasis to make India more business-friendly and spoke about increasing funding to states.
While some Industry players lauded the Center's move to introduce big-ticket reforms in areas such as agriculture, MSMEs and power distribution companies during the last five days, many expressed shock to be left out completely even as their business took a big hit due to the Covid-19 pandemic.
Federation of Associations in Indian Tourism & Hospitality (FAITH) said on Sunday that the Indian tourism industry has gone into a state of disbelief and shock.
"Indian tourism travel and hospitality is said to impact 10-12% of India’s employment which is believed to cover almost 5 crore + direct and indirect jobs. The industry has gone numb from a lack of any umbrella direction from the Government or without any fiscal & monetary support," FAITH said.
It added that with no visibility of cash inflows the Indian tourism industry is now looking at large scale bankruptcies, business closures which will lead to job losses across cities, towns and hinterlands of India.
Retail association body CAIT, which has close ties with the ruling party, also expressed its grief. CAIT said that the entire trading community today is extremely upset with the Government for this 'step-motherly' treatment.
"The traders will be landing into great financial crisis on the lifting of lockdown as they will have to pay salary, interest, bank loans, taxes and various other financial obligations. It is expected that nearly 20% traders will have to wind up their business and another 10% traders dependent on these 20% traders will have to close their business. Under such a grim situation the Government has refused to handhold the traders. It’s a pity that such an important sector of the economy has been greatly overlooked," the Retail body said.
The Government also decided to overlook suggestions made by prominent industrialists and economists to pay Rs 5,000-7,500 to the most vulnerable section of society over the next three months. This, according to many experts, would have helped in creating demand in the economy. The government, however, decided to increase allocation in MGNREGA. This move was also welcomed by many.
"The increase in MGNREGA outlay by Rs 40,000 cr is quite good as it can potentially cover 2 crore of migrants who can take 100 days employment, provided there are projects," Care Ratings said.
Automobile and aviation are the two other sectors who despite holding numerous meetings with the Government in the recent past did not find any major mentioning in the package. The Telecom sector, whose services remain active in the lockdown period was also sidelined. Similarly, startups and new-age businesses who are facing the risk of going bust due to a tectonic shift in consumption behavior were left out at large in the package.
Chamber body FICCI said that while these measures will surely help the economy in the medium to long term, they are hopeful that the government would consider measures to support battered segments of the industry including tourism, hospitality, aviation and healthcare. "FICCI has requested that a minimum amount of Rs 20,000 crore be allotted for these sectors as they have seen a maximum dip in demand and will also take much longer to recover from the set-back seen," it said.
Even the struggling Real Estate, which had some takeaways in the package, felt major concerns of sector were not answered.
“Whilst we understand the constraints of the government, from the real estate sector point of view, the announcements were inadequate in addressing the issues faced by the sector. The announcements have provided for an extension of CLSS scheme and an extension of deadline by six months under RERA for registered projects as a relief to the sector. We also hope that the partial Credit Guarantee to NBFCs and HFCs will enhance liquidity support and to assuage risk concerns of lenders, thereby help the sector to remain positive during this crisis. Overall, we feel disappointed that no direct demand stimulus was announced that could have benefited the beleaguered sector,” Shishir Baijal, Chairman & Managing Director, Knight Frank India said.