Apex industry association ASSOCHAM has suggested certain critical measures to mitigate the impact of Covid-19 on the Indian economy.
Dr. Niranjan Hiranandani, President, ASSOCHAM, said, “The time to take action is right now. We need the implementation of these measures on a war footing if we are to save the Indian economy from tanking.”
The industry body has impressed upon the Reserve Bank of India (RBI) to immediately announce a moratorium for debt-servicing (principal and interest) and a big reduction in the lending rates. Besides, the RBI should restructure bank loans across the board with adequate forbearance. Dr. Hiranandani said massive bailouts have been announced by the central banks and the governments in major economies of the world in the fast-evolving situation with trade and businesses coming to a halt in lock-downs.
In a joint position paper prepared by the ASSOCHAM and consulting firm, Primus Partners, a strong case has been made for the government to extend an immediate relief of `3,000-5,000 per month - for a few months - to those working in the sectors affected heavily by Covid-19 through Jan Dhan accounts. The government may also provide tax credit to companies that extend two weeks of paid sick leave to meet the quarantine time frame for any employee and his/her family. Vigorous implementation of the Ayushman Bharat health insurance scheme has also been recommended.
ASSOCHAM has also stated that urgent relief and lines of credit should be provided to the worst hit sectors such as tourism and hospitality, aviation, FMCG and retail. To boost consumer confidence and liquidity, the government can consider a payroll tax holiday for a quarter. Extending such relief can be targeted to workers within a certain tax bracket to support low-mid income groups.