A time-bound conflict-linked emergency credit line guarantee scheme — similar to the one during the Covid pandemic, a three-month moratorium on asset classification for NPA and an extension of delivery timelines for central and state public sector undertaking (PSU) contracts are some of the suggestions made to the Centre by the industry in the wake of the ongoing West Asia war.
Industry body CII also called for rationalisation of the tax and duty structure on energy inputs such as temporary waiver of 2.5 per cent customs duty on LNG import and temporary exemption from long-term capital gains tax for foreign investors in primary market investments, with the qualifying holding period extended from two to three years to sustain capital inflow.
The trade body observed that the war continues to rage, with underlying supply side pressures in energy, logistics and trade channels persisting beyond the initial phase.
“Industry feedback indicates that while the first round of policy measures has mitigated the immediate impact, several sectors continue to face operational and financial stress, particularly MSMEs, exporters and energy intensive industries,” CII said.
Majority of the 20 suggestions put forward by the industry body were directed to the finance ministry and the Reserve Bank of India.
“India’s experience during previous crises has shown that coordinated fiscal and monetary action can significantly strengthen resilience. The next phase of policy response may therefore need to focus on targeted liquidity support, credit facilitation, trade cost management and foreign exchange stability,” CII director general Chandrajit Banerjee said in a statement.
The chamber recommended that additional collateral-free working capital be extended to affected enterprises through government-backed guarantees, particularly targeting MSMEs, exporters and gas-dependent sectors.
The Modi government has so far taken a few steps to rationalise taxes. On March 27, it cut additional excise duty on petrol and diesel by ₹10 per litre in order to protect the consumers from price rise by safeguarding financial health of public sector companies.
