Industry organization PHD Chamber of commerce and Industry has come out suggesting a stimulus package of Rs 11 lakh crore to mitigate the impact of pandemic COVID-19 on trade and Industry.
Specifying both short-term and long-term suggestions to the government the Dr DK Aggarwal, President PHD Chamber of Commerce and Industry said ‘We expect a significant fiscal stimulus of atleast 5% of GDP which comes to around Rs 11 lakh crore’.
He further added that as the Government has already provided a stimulus of Rs 2 lakh crore, therefore, it is for the remaining Rs 9 lakh crore in terms of various relief measures and benefits to India’s trade and industry, said Dr D K Aggarwal.
The chamber has suggested an automatic increase of 25% in working capital without any procedure and application. The increased working capital should be allowed to convert into a term-loan with a provision of 3 years repayment period, said Dr.Aggarwal.
“Suggestions to Gov :
Automatic increase of 25% in working capital without any procedure and application
Immediate release of outstanding payments of MSMEs, from the Government and PSUs
To defer the EMIs on term-loans for 6 months, special interest subvention @ 3% p.a. in loans to MSMEs”
In other short term suggestions to the Government, it suggested an immediate reduction in the lending rate by all the banks to percolate the full effect of recent 75 basis points cut in repo rate by the RBI.
Also, we suggest to defer the EMIs of the term-loans for 6 months, special interest subvention @ 3% p.a. in loans to MSMEs and other badly affected industries, abolish all fixed charges of all the utilities and defer utilities bills by 3 months, said Dr Aggarwal.
It advocated the release of outstanding payments of MSMEs, from the Government and PSUs.
Simultaneously we request the Government to pay 75% of salary of the workers of the lockdown period and employer contribution in PPFs during lock down period should be brought down to zero to ease the pressure financial burden of the industry , said Dr Aggarwal.
In its long-term suggestions some of the measures include reducing income tax of proprietorship and LLPs firms to the level of 25% for old and 15% for new companies; reduce the customs duties on basic raw materials by at least 5 percentage points.
Increase in government consumption expenditure and capacity building by the business firms would be crucial at this juncture to rejuvenate the economy to its potential growth trajectory of 7-8% in the next few years, said Dr Aggarwal.