Associated Chambers of Commerce and Industry of India (ASSOCHAM) proposes several radical measures to keep the country's economy's subsistence through its fight with COVID-19 pandemic. With a sentiment that to tackle the unprecedented times, exceptional measures are essential, apex industry body, ASSOCHAM has recommended a 16-point agenda and a stimulus package of at least $200-$300 billion. The Chamber believes that in keeping up with most economies of the world to institute stimulus measures with 10 percent of the Gross Domestic Product (GDP), the Indian economy would need a transfusion of over $200 billion with an ability to go up to $300 billion, over the next 12-18 months. He stated that out of the 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 loss of income.
Such an infusion would help businesses and workers tide over the challenging situation. It will be critical to ensure we proceed with three objectives i.e. immediate assistance to employees and labour through direct transfers and through employers, ensuring that companies have enough cashflow to survive the downturn, and finally stimulating demand and investment to revive the economy through fiscal and tax measures.
Some of the key recommendations to the Finance Ministry includes, the 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 interest rate/repo-rate by another 100 bps by the Reserve Bank of India. ASSOCHAM has also recommended the reduction in GST across the board by 50% for 3 months and 25% for the fiscal.
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