Industry leaders insist on relief, bailout package

Tribune News Service

New Delhi, April 8

The industry is displaying impatience over one of the world’s most aggressive lockdowns despite Prime Minister Narendra Modi telling a meeting of parliamentary floor leaders today that its relaxation does not seem possible. The only ray of hope is that the PM has spoken about taking on board the views of chief ministers who at present hold different views.

FICCI is in favour of phased opening of non-hotspot economic markets and boosting Covid-19 medical support across India. “This will instil confidence and preparation for the industry, and we stand united in extending support to the Business Continuity Plan,’’ said FICCI president Sangita Reddy.

The CII, too, is of the view that the shutdown should be lifted as early as feasible, in a safe and calibrated manner. “It is important to safeguard the macro fundamentals to ensure that the country does not suffer significant rating downgrades and potential flight of capital,’’ said CII Director General Chandrajit Banerjee.

With India forecast to log barely one to two per cent GDP growth in the 2020-21 fiscal, the industry is also seeking a bailout package.

The PHD Chamber expects an additional Rs 9 lakh crore stimulus package which its president DK Aggarwal estimates will help GDP growth rate reach five per cent. The government has already provided a stimulus of Rs 2 lakh crore, therefore, “our expectation is for the remaining Rs 9 lakh crore in terms of various relief measures and benefits to India’s trade and industry,’’ he added.

The PHD Chamber has also sought an automatic increase of 25% in working capital which should be allowed to convert into a term-loan with a provision of three-year repayment period.

The industry also wants the government to pay 75 per cent of salary of the workers during the lockdown and employer contribution in PPFs be brought down to zero.

The CII has suggested a fiscal support package of two per cent of the GDP in addition to the Pradhan Mantri Garib Kalyan Yojana. It wanted additional support to the people at the bottom of the pyramid and support to industry through the banking system.

“Our estimates are that the economy will need a credit expansion of 14-15 per cent. Additionally, support through banks will allow the government a leverage of 5-6 times, mitigating the fiscal impact,” said Banerjee while supporting the PHD Chamber’s pleas for working capital enhancement and support for payment of wages to all industry.