NEW DELHI: Prime Minister Narendra Modi is learnt to be working on a blueprint to change the character of the Indian economy, which is bogged down by the COVID-19 pandemic.
From cleaning up the unorganised sector to helping small enterprises rise to become big firms, there are grand plans to posit India as the world’s manufacturing destination.
According to sources, policy wonks have also suggested ideas to deal with the grave situation in the private sector, where companies have started firing employees or cutting their salaries.
Proposals range from wage subsidisation through incentivising working capital to creation of contingency funds to insure wage payments. The latter could be shown as expenses in the balance sheets.
Sources said the government has taken a grim view of private firms laying off staff and cutting salaries.
“India has supplied critical medicines to fight the pandemic to over 50 countries. They showcase Make in India, Made for World theme that the government is currently working on. Except for public-sector enterprises, India has not created great manufacturing names in the post-Independence era. COVID-19 pandemic-led global disruptions give India the opportunity to adjust the Make in India slogan to the global needs. There are a number of ideas to pursue the dream,” sources said.
One Cabinet minister is learnt to have suggested the government step in to boost the financial strength of MSMEs to help them acquire capacities to fill the void in the global manufacturing supply chain.“This could be done through one of the many financial interventions, including easy finance, debt financing and even equity infusion,” sources said.
Most importantly, the government is examining ideas which can expedite the cleaning up of the unorganised sector so that they join the mainstream through financial incentives, besides further simplification of goods and services tax.
“Three rates within a short span of time along with deferment of the tax liabilities are among the few ideas on the table, which the government may unveil in due time,” sources said.
The government is likely to unveil measures of the roadmap in phases, beginning the first booster dose in the next few days, which may also extend helping hands to a few sectors, including textile and hospitality.