INDIA INC SEEKS STIMULUS PACKAGE

April 2020 \ Business & Investment \ BUSINESS AND GOVERNANCE

INDIA INC SEEKS STIMULUS PACKAGE

India Inc has requested the Centre to immediately ...

FEBRUARY PRODUCTION EXPANDS

4.5% Higher manufacturing and mining sector’s output accelerated the growth rate of India’s factory production by 4.5 per cent in February from 2.08 per cent reported for January 2020. Similarly, on a year-on-year basis, the growth rate of factory output during the month under review was higher than the rise of 0.2 per cent recorded during February 2019. “The Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 for the month of February 2020 stands at 133.3, which is 4.5 per cent higher as compared to the level in the month of February 2019,” the Ministry of Statistics & Programme Implementation said. “The cumulative growth for the period April-February 2019-20 over the corresponding period of the previous year stands at 0.9 per cent,” it added.

Besides, the industry body requested the government to modify the FRBM Act to consider the debt to GDP ratio as a metric and not fiscal deficit.

“The Government needs to set an example for other businesses with no bills being unpaid for more than 15 days,” Sood said, as per a statement. “This will enormously help the credit cycle and will also bring down tender prices for everything.” With the deflation that is expected in overall demand, the government should implement the National Infrastructure Plan with no loss of time, once the lockdown is completed.

Some of the other key recommendations to the Finance Ministry include one-time loan restructuring to all corporates assuming a principal repayment start date moving upwards from March 2021, NCLT provisions to be held in abeyance for 6 months and a further reduction of repo-rate by another 100 bps by the Reserve Bank of India.

Another leading industry body PHD Chamber has asked the Centre to provide Rs 11 lakh crore stimulus package to mitigate the impact of the Covid-19 pandemic.

PHD Chamber of Commerce and Industry President D.K. Aggarwal has recommended the Centre to institute a fiscal stimulus of at least 5 per cent of the country’s GDP which comes around Rs 11 lakh crore.

“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,” Aggarwal said , as per a statement.

“A significant stimulus to the tune of 5 per cent of GDP would help the economy to grow at around 5 per cent in the current financial year 2020-21.”

Furthermore, the industry body recommended to the government to increase consumption expenditure in the economy and compromise with the fiscal deficit “even if it slips by 2 to 3 percentage points in the current financial year 2020-21”.