#Lockdown2: Industry bodies want package of nearly Rs. 16L crore
As India's lockdown was extended for another nineteen days on Tuesday, several industry bodies asked the government to release a financial package to help them and revive growth in various sectors. Experts think a package of Rs. 14 to 16 lakh crore will help in mitigating the economic effect of the coronavirus pandemic. The government is said to be working on some aid.
Yesterday, after PM Modi announced the extension, the Federation of Indian Chambers of Commerce and Industry (FICCI) predicted a loss of Rs. 40,000 crore daily due to the restrictions. The body's President Sangita Reddy said nearly 40 million jobs are at a risk between April and September 2020. The industry is hoping for a package like the one US announced.
The same emotion was reflected by Niranjan Hiranandani, President, Associated Chambers of Commerce and Industry of India (ASSOCHAM). He told HT, "The economy needs a stimulus package of at least about Rs. 14 lakh crore, including around Rs. 2.20 lakh crore fertilizer dues, payments from public sector companies, tax, and other refunds." Hiranandani suggested cutting GST by 50% for six months to boost demand.
Hiranandani said another way to create demand is by paying Rs. 80,000 crore to farmers through direct cash transfer. Adding that MSMEs are staring at closure due to liquidity crunch, he added, "They need about Rs. 2.80L crore in terms of low-cost credit and other incentives." Similarly, DK Aggarwal, President of PHD Chambers of Commerce and Industry, demanded a package of Rs. 16L crore.
Almost all sectors are undergoing a daunting phase due to the lockdown. President of Federation of Indian Export Organizations (FIEO), Sharad Kumar Saraf, said exporters are facing the brunt, small companies are on the verge of closure, and some don't have money to pay wages for this month. Disappointed at the extension, he said the sector will face immense trouble when the country reopens.
"It'll take longer to get the wheels turning. But I feel more comfortable to put this behind us rather than face a shutdown again later. I think that farm sector should open as soon as possible," said Confederation of Indian Industry (CII) President Vikram Kirloskar.
It seems that the suggestion to open the farm sector struck a chord with the government. Announcing the set of guidelines a short while ago, the Ministry of Home Affairs allowed all agricultural activities to function from April 20. Agencies involved in the procurement of agriculture items will function and Mandis that are operated by Agriculture Produce Market Committee (APMC) will also work.
Meanwhile, the government is working on an economic package. "The government has already given Rs. 1.7 lakh crore package on March 26. The next is expected sooner than later. But, priority is direct protection of a vulnerable section of society, informal sector and MSME," a person in the know told HT. Another person said the announcement will be made after assessing the requirement.