The Confederation of Indian Industry (CII) on Wednesday lauded Finance Minister Nirmala Sitharaman for announcing the first phase of economic stimulus, terming it as an "impactful package" to boost the economy with "a prudent and calibrated set of measures".
In a statement, Vikram Kirloskar, President, CII, said the industry is highly enthused by the shape of the first phase stimulus package announced by the Finance Minister for mitigating the economic costs of the COVID-19 crisis.
"The prudent and well-calibrated set of measures announced today is expected to be supplemented by more such measures in the days to come which, will help stabilise the economy to some extent. CII looks forward to the forthcoming packages," stated Kirloskar.
"The sectors covered in the initial phase are clearly the ones that required the highest policy attention at this juncture, including MSME, power, and construction and real estate. The impact of the package totalling Rs 20 lakh crore to be unveiled in the next few days would add to spending power and bring relief to millions of enterprises that employ huge numbers of workers. We expect the stimulus measure to impart stability and growth to the economy," said Kirloskar.
Providing the details of the first tranche of the package, FM Sitharaman announced a slew of measures to alleviate the heightened stress being faced by the MSMEs. Complementing the FM for addressing the MSME sector in the first round, CII said that the measure to extend Rs 3 lakh crore collateral-free automatic loans with 100 per cent government credit guarantee is a major shot-in-the-arm for beleaguered MSMEs. CII had been pushing for this and it is expected to encourage banks to lend financial support to the MSMEs for restarting their operations while safeguarding jobs.
In addition, the provision of Rs 20,000 crore subordinate debt for stressed MSMEs is expected to provide additional relief to the ailing sector, CII said in its statement. The industry body also appreciated the revision in MSMEs' definition, which will ensure that they continue to grow in size.
CII also welcomed the announcement under which the government and CPSEs have been asked to clear their pending dues to MSMEs within the next 45 days.
The proposal to provide liquidity in the hands of the consumers and businesses in the present challenging scenario through the reduction in the statutory PF from 12 per cent to 10 per cent for 3 months is expected to increase take-home pay and provide liquidity in workers' hands, CII said.
CII lauded the host of liquidity easing measures for the stressed NBFCs in the form of Special and Partial Credit Guarantee Schemes, which will help them on-lend to the productive sectors of the economy.
"The announcements laid special emphasis on rejuvenating the infrastructure and construction sector for bringing growth back to the economy. In wake of the huge losses being incurred by the discoms, Rs 90,000 crore liquidity infusion was need of the hour to ensure continued power generation," said CII.
Amid the prolonged periods of lockdown in view of COVID-19, CII welcomed government's direction to states to treat COVID-19 as an event of 'Force Majeure' under RERA, and extension of registration and completion dates by 6 months.
"On taxation front, the reduction in TDS and TCS by 25% of the existing rates is expected to provide additional funds at the disposal of the taxpayers. In addition, the extension in host of tax filing dates will help in tiding over the current period of crisis," CII said.
Prime Minister Narendra Modi on Tuesday announced a massive stimulus package of Rs 20 lakh crore to support India's fight against coronavirus. The Atma Nirbhar Bharat Abhiyan economic package of Rs 20 lakh crore, equivalent to 10 per cent of India's GDP, is among the biggest stimulus in the world after the economic packages announced by Japan, which is over 21 per cent of its GDP, and the United States, which is 13 per cent of its GDP.
By Chitranjan Kumar