New Delhi (NVI): The Associated Chambers of Commerce of India (ASSOCHAM) today supported the Central Government’s move to extend lockdown and save people from the unprecedented global pandemic while seeking urgent financial help for industry, trade and employees, observing that “the pain of the crisis will be felt more in coming weeks and months”.
ASSOCHAM secretary general, Deepak Sood said that the body has fully supported PM Modi’s decision to extend the lockdown, with a firm conviction that the government would soon be announcing a large and effective financial package for protecting agriculture, industry, trade with a particular focus on the MSMEs and millions of jobs.
“Prime Minister’s decision to consolidate gains from the earlier 3-week lockdown is a wise move, even though it has economic costs, as Shri Modi has talked about in his address to the nation,” Sood said, adding that PM’s call to the people and the state and local authorities to strictly enforce the lockdown till April 20 for qualifying to get relaxation is a double-edged tool for effective results.
“His concern for the most vulnerable sections of the society and the agriculture is highly appreciated and would help revive the economy after Coronavirus is gone,” Sood said.
The ASSOCHAM secretary-general said the trade body has been in constant touch with the Centre, states and other institutions like the RBI, sharing ground reports on the state of industry, trade and the broader economy.
“The situation is quite challenging, but somehow, the industry is managing to stay afloat and pay salaries and other essential disbursements in the supply chain. However, the situation may become unsustainable in the coming weeks, making it extremely important for the Government to announce an effective and sizeable package for the economy,” he said.
“There is a broad national consensus that the Government can go in for a wider fiscal deficit, even though the unconventional tool of monetising it by direct bond buying by the RBI. The subsistence funds are required both for the industry and trade as also their employees,” he said.
Besides, the massive health infrastructure, so urgently needed to fight the health battle requires large resources. There is not much alternative but to spend our way through this crisis on keeping the economic lifeline alive and robust. The FRBM Act has a provision for such a window, he added.
ASSOCHAM further added that the RBI needs to keep a strict watch on currency movement in the foreign exchange market to guard against any volatility. “Large foreign exchange reserves in excess of USD 450 billion are a great source of comfort at this critical time,” said Sood.
The chamber has also worked out and shared with the government a plan for graded re-opening of the economy with the mantra of social distancing. “We hope that when guidelines for selective opening of the sectors and the areas are issued, our suggestions would find value in the same,” added the secretary general.
Sood further stated that the Indian economy has an inherent strength that is enabling the uninterrupted supply chain of essentials. “However, going forward, this supply chain may face challenges if quick and effective steps are not taken. These include smooth operation of truckers with adequate manpower, reaching out to farmers and their produce for perishable commodities. There are several industries which are part of the crucial supply chain, and the same must be kept in operation,” he said.
ASSOCHAM had approached the government yesterday also for an immediate and an impactful stimulus package without getting weighed in by any possible downgrade by global rating agencies.
In a letter to Finance Minister Nirmala Sitharaman, the industry body, having assessed the ground impact of the three-week lockdown on the industry, trade and the broader economy, had stressed that the fiscal stimulus is a must for saving both ‘Jaan’ and ‘Jahan’, “as has been so rightly emphasised by the Prime Minister”.
