India Inc has sought a huge stimulus package from the government amid reports that the Centre is preparing a second round of boosters for the economy ravaged by the Covid-19 pandemic.
The Confederation of Indian Industry (CII) has sought a fiscal support package for 2020-21 up to 2 per cent of India’s GDP,
Rival Assocham wants a stimulus package of at least $200-300 billion and has tabled a 16-point agenda for the finance minister. India’s GDP is around $3 trillion, meaning Assocham is seeking support of up to 10 per cent of GDP.
The government had last month cobbled up a Rs 1.75 lakh crore relief package that was targeted at the poor.
Assocham secretary-general, Deepak Sood said that in keeping up with most economies of the world instituting stimulus measures up to 10 per cent of GDP, the Indian economy would need an infusion of over $ 200 billion with an ability to go up to $300 billion over the next 12-18 months.
He added that of this corpus, $50-100 billion cash needs to be infused in the system over the next three months to arrest the loss of jobs and
compensate for the loss of income.
In its submission, Ficci has recommended that an additional sum of Rs 1 lakh crore, in excess of the first stimulus package of Rs 1.75 lakh crore, must be earmarked and transferred to states to supplement their efforts to cater to the immediate needs of the poor and informal sector workers.
It also mooted that interest-free and collateral-free loans be given to MSMEs having a turnover of less than Rs 500 crore for a period of up to 12 months to enable them to cover fixed costs, salaries and other operational expenses.
While it remains to be seen if North Block or other regulators accede to these recommendations, they come at a time several economists have sharply cut their growth forecasts for India. At the same time, there are concerns over large fiscal slippage.
According to the economic research wing of SBI, many sectors could see huge job losses, though the employers are holding off such decisions now. The most severely impacted sectors could be aviation, travel, hospitality, retail, manufacturing and automobiles.
“Apart from the Rs 1.75 lakh crore package, the government needs to announce a large package for the sectors which are in the high and medium risk category,” it said in a report.