At a time when there are talks of a lockdown extension, industry body CII has recommended a calibrated exit plan to the government that will help in cushioning the economic slowdown after the restrictions are lifted.
According to CII, the exit plan must coincide with the economic stimulus package, which will collectively help in kickstarting the economy.
If additional support is not announced, CII fears that many macro-fundamentals will suffer and subsequently result in significant ratings downgrades.
CII suggested the government to focus on sectors that provide mass employment first, to protect low wage employment and limit the opening of places like malls, restaurants cinema halls in phase 1 of the exit plans.
Support should also include working capital enhancement and support for payment of wages to all industry and special re-construction terms loans for MSMEs and the stressed sectors, CII added.
On fiscal support package, the industry body recommended a package (2 per cent of the GDP) in addition to the Pradhan Mantri Garib Kalyan Yojana.
Detailing the suggestions, Chandrajit Banerjee, Director General CII, said, The government should extend additional support to the people at the bottom of the pyramid through cash transfers. Support to the industry could come through the banking system.
Explaining the rationale, he said, Our estimates are that the economy would need a credit expansion of 14-15 per cent. Additionally, support through banks would allow the government leverage of 5-6 times, mitigating the fiscal impact.
Other suggestions include passing orders to facilitate the return of employees to workplaces in a phased manner from 50 per cent to 75 per cent and then finally 100 per cent.
The industry body also proposed bringing migrant labourers back as they do not have any daily income to support their families.
CII, however, suggested the government to ensure that social distancing, screening, sanitisation continues at all facilities that open up after the lockdown.
Also Read | Coronavirus in India: Candles, diyas lit on PM Modi’s call, no immediate report of power tripping
Also Read | India Today Covid19 tracker: In 5 days, India’s coronavirus cases rose by 120%
Also Watch | Over 3,500 tested positive for coronavirus in India