The Covid-19 pandeic has adversely impacted the Indian economy. Shaunak Roy, Assistant Professor, Department of Management and Commerce St. Xavier’s College (Autonomous), Kolkata informed BE, “While less than 25% of India’s $2.8 trillion economy remains functional at the present, India is pegged to suffer losses exceeding Rs 32,000crore during the first phase of the lockdown.”
The Bharat Chamber of Commerce in partnership with Bharat Chamber Young Business Forum recently organised a special e-session titled ‘Post COVID-19 Reconstruction: Challenges and New Opportunities in India’. During the session, Nitin Gadkari, Union Minister of Micro, Small and Medium Enterprises and Road Transport & Highways, highlighted the present relief and support measures undertaken by the central government. He also highlighted the government’s future roadmap to help industries overcome the losses incurred in the lockdown period.
Since the global pandemic has made China unpopular among investors, India could use this opportunity to its advantage. Gadkari pointed out that India could attract fresh foreign investments. However, he added that reduction in production costs - by bringing down logistics and power costs - is necessary for India to have an edge over China. Piyush Goyal, Union Minister of Commerce and Industry and Railways, on the e-session titled ‘Ensuring Certainty in Uncertain Times: The Embryonic Role of Government and Business’ voiced a similar opinion. He observed that the Indian government is framing policies to attract foreign investments which could make India a global economic superpower. He also stated, “The
global pandemic has made countries realise that they do not wish to depend only on a few countries.”
Gadkari stated that his department is working on the construction of 22 new ‘Green Express Highways’ in the country through rural areas where the land equation is easier to reduce distances between cities and towns and that the government plans to set up ‘Industrial Clusters’ along these highways.
Currently, MSMEs are facing a lot of problems due to pending payments from PSUs and other departments of the government. Gadkari informed that that the government is working on a scheme - which will involve an estimated Rs1 lakh crore to Rs 2 lakh crore - where the government will act as a guarantor and all pending payments of the MSMEs will be borne partially by the government and PSUs. He further added, “The government is trying its best to clear all payments of MSME contractors – at least for the 100% owned government companies, even if they have become insolvent.”
In a related webinar conducted by ASSOCHAM, Deepak Sood, General Secretary, ASSOCHAM said it is gratifying to know that the government is pursuing the proposal submitted by the chamber for setting up a Rs 1 lakh crore fund for injection of liquidity into small businesses.
Goyal also clarified that the MEIS has already been extended from March to December
2020. Similarly, the ‘Interest Equalisation Scheme’ has also been extended with an aim
to cushion the blow to exporters in the wake of COVID-19 pandemic. He stated, “Any sector
facing problems related to anti-dumping duties and other import related matters can get in touch with DGTR and MSMEs can also avail free of charge legal services in this matter.” He also assured that the pending dues from the Indian Railways will be cleared at the earliest.
Reacting to apprehensions on resuming of operations of units which have remained closed for over a month, Gadkari informed, “We need to start industries but we cannot afford to cause the spread of the virus. However, units located in safe zones and ready to follow preventive measures for containment of the virus will be allowed to start their operations soon.” During the session, Goyal welcomed the suggestion of increasing import duty on synthetic PU leather. Responding to a question related to the cash crunch of tea producers, Goyal appreciated the suggestion of giving short-term soft loans to tea producers at a reduced interest rate and assured that he will raise the matter with the finance ministry.