PM move to build on lockdown gains wise; says ASSOCHAM seeking urgent financial help for industry, trade, employees
Kolkata/IBNS: Business body ASSOCHAM on Tuesday fully supported Prime Minister Narendra Modi for extending the nationwide lockdown till May 3 for saving each and every Indian from the unprecedented global pandemic, with a firm conviction that the government would soon be announcing a large and effective financial package for protecting agriculture, industry , trade with a particular focus on the MSMEs and millions of jobs.
''Prime Minister's decision to consolidate gains from the earlier 3-week lockdown is a wise move, even though it has economic costs , as Shri Modi has talked about in his address to the nation. His call to the people and the state and local authorities to strictly enforce the lockdown till April 20 for qualifying to get relaxation is a double-edged tool for effective results. His concern for the most vulnerable sections of the society and the agriculture is highly appreciated and would help revive the economy after Coronavirus is gone," said ASSOCHAM Secretary General Deepak Sood.
He said ASSOCHAM has been in constant touch with the Centre, states and other institutions like the Reserve Bank of India, sharing the ground reports on the state of industry, trade and the broader economy.
The situation is quite challenging, but somehow, the industry is managing to stay afloat and pay salaries and other essential disbursements in the supply chain. However, the situation may become unsustainable in the coming weeks, making it extremely important for the Government to announce an effective and sizeable package for the economy.
''There is a broad national consensus that the Government can go in for a wider fiscal deficit , even though the unconventional tool of monetising it by direct bond buying by the RBI. The subsistence funds are required both for the industry and trade as also their employees. Besides, the massive health infrastructure, so urgently needed to fight the health battle requires large resources. There is not much alternative but to spend our way through this crisis on keeping the economic lifeline alive and robust. The FRBM Act has a provision for such a window," said Sood.
The ASSOCHAM has submitted several specific suggestions with regard to roll over of the bank loans across the board, further slashing the interest rates, immediate amendments in the IBC Act for putting it in abeyance for at least six months and changes in the RBI rules to allow banks for liberal lending without the fear of NPA slippages. Moratorium on EMIs and corporate debt repayments needs refinement at operational level.
Besides, the RBI needs to keep a strict watch on currency movement in the foreign exchange market to guard against any volatility. "Large foreign exchange reserves in excess of USD 450 billion are a great source of comfort at this critical time.''
The chamber has also worked out and shared with the government a plan for graded re-opening of the economy with the mantra of social distancing. "We hope that when guidelines for selective opening of the sectors and the areas are issued, our suggestions would find value in the same ."
Deepak Sood said, the Indian economy has an inherent strength that is enabling the uninterrupted supply chain of essentials. However, going forward, this supply chain may face challenges if quick and effective steps are not taken. These include smooth operation of truckers with adequate manpower, reaching out to farmers and their produce for perishable commodities. There are several industries which are part of the crucial supply chain, and the same must be kept in operation.