Ficci also made
a case for the need to create a self-sufficiency fund for innovation,
construction and manufacturing clusters to make use of the emerging
opportunities in the wake of disruption in global supply chain.
Illustration: Dominic Xavier
Seeking immediate support
for the Indian economy hit by COVID-19, industry body Ficci said an additional
fiscal support of Rs 4.5 lakh crore is required at the current juncture besides
a quick release of Rs 2.5 lakh crore stuck in refunds and other government
payments.
In a letter to Finance
Minister Nirmala Sitharaman, Ficci president Sangita Reddy also made a case for
the need to create a self-sufficiency fund for innovation, construction and
manufacturing clusters to make use of the emerging opportunities in the wake of
disruption in global supply chain.
The fund can be provided in
tranches in the medium term, she said.
Seeking an "immediate
support", Reddy said the problem being faced is largely that of liquidity,
and immediate release of money stuck in refunds and other government payments
to the tune of Rs 2.5 lakh crore will immensely help tide over the crisis.
"This may have already
been provided for in the budget," she said.
Further, additional fiscal
support is required for vulnerable communities over and above the sum provided
for in the Garib Kalyan Yojana announced earlier.
Fiscal support is also
needed for MSMEs in order to help them get back on track.
Besides, funds are needed
for upgradation of healthcare infrastructure to effectively deal with the
current situation and for support to sectors like aviation and tourism that
have been hit hard due to the lockdown.
"Additional fiscal
support required at the current juncture for this purpose is about Rs 4.5 lakh
crore," the letter said.
The fiscal support sought
includes "small amount" of Rs 10,000 crore towards proposed COVID-19
liquidity bridge required to give comfort to banks to restructure/ provide
additional loans to large companies whose balance sheets have been impaired due
to the virus outbreak, it added.
"Government may need
to provide for about Rs 30,000-40,000 crore as a guarantee to banks over a
4-year period and in the current year, it can provide about one-fourth of that
amount.
"This small amount
will have a huge positive impact on these companies and their supply chain that
includes several small and medium sized vendors, which otherwise may not
survive the current crisis," the chamber said.
The central government had
imposed a 21-day lockdown from March 25 to check the spread of coronavirus.
The lockdown has been
extended twice, though with some relaxations.
The lockdown has severely
affected the economic activities in the country.
In order to ensure that
weaker sections of the society "continue to get basic amenities and do not
get impacted" during lockdown a Rs 1.70 lakh crore Pradhan Mantri Garib
Kalyan Package (PMGKP) was announced by the finance minister on March 26.
The government has also
been providing cash transfers to Jan Dhan accounts held by women.
The RBI on its part has
sharply reduced the key short-term lending rate with an aim to spur credit
disbursement.
It also announced a Rs
50,000 crore special liquidity facility for the mutual fund sector in the wake
of redemption pressures related to closure of some debt.
Tags
Economy