The government should consider a reduction in GST by 50 per cent for at least three months and 25 per cent for the fiscal, recommended ASSOCHAM.
People buying vegetables in Ghaziabad on April 8 (Photo Credits: PTI)
A stimulus package is the need of the hour to thwart the global recession brought about by the novel coronavirus outbreak, says industry body ASSOCHAM. The Associated Chambers of Commerce of India (ASSOCHAM) further adds that a minimum stimulus of USD 200 billion is required to support the Indian economy in this time of crisis. A corpus of $50-100 billion cash needs to be infused over the next three months to arrest the loss of jobs and compensate for the loss of income.
The industry body also said that the government should consider a reduction in GST across the board by 50 per cent for at least three months and 25 per cent for the fiscal.
In a recommendation letter to Finance Minister Nirmala Sitharaman, ASSOCHAM President Dr Niranjan Hiranandani has proposed several measures to support the country’s economy through its fight with the Covid-19 pandemic. The Chamber has said that in keeping up with most economies of the world to institute stimulus measures with 10 per cent of the Gross Domestic Product (GDP), the Indian economy would need a transfusion of over USD 200 billion with an ability to go up to USD 300 billion, over the next 12-18 months. Out of the corpus, USD 50-100 billion cash needs to be infused in the system over the next three months, to arrest job losses and compensate for the loss of income.
Dr Hiranandani said that such an infusion would help businesses and workers tide over the challenging situation. ‘It will be critical to ensure we proceed with three objectives-immediate assistance to employees and labour through direct transfers and through employers, ensuring that companies have enough cash flow to survive the downturn, and finally stimulating demand and investment to revive the economy through fiscal and tax measures,’ added the ASSOCHAM president.
ASSOCHAM has also recommended the reduction in GST across the board by 50 per cent for three months and 25 per cent for the fiscal. “The final GST due should be payable in six quarterly installments starting October 2020 with no interest. The final income tax of FY 2019-2020 and advance tax FY 2020-2021 should be payable starting October 2020 in six quarterly installments with no interest.