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FICCI tells FM economy needs ₹4.5 lakh cr fiscal support
13 May '20
2 min read
Pic: Shutterstock
Seeking immediate support for the Indian economy hit by COVID-19, the Federation of Indian Chambers of Commerce and Industry (FICCI), in a recent letter to finance minister Nirmala Sitharaman, said an additional fiscal support of ₹4.5 lakh crore is needed now apart from a quick release of ₹2.5 lakh crore stuck in refunds and other government payments.
There is also a need to create a self-sufficiency fund for innovation, construction and manufacturing clusters to make use of the emerging opportunities in the wake of disruption in the global supply chain, FICCI president Sangita Reddy wrote. The fund can be provided in tranches in the medium term, she said.
The problem being faced is largely that of liquidity and additional fiscal support is required for vulnerable communities over and above the sum provided for in the Garib Kalyan Yojana announced earlier, she said in her letter.
Fiscal support is also needed for micro, small and medium enterprises (MSMEs) to help them get back on track, she was quoted as saying by a news agency.
Besides, funds are needed for upgradation of healthcare infrastructure to effectively deal with the current situation and for support to sectors like aviation and tourism that have been hit hard due to the lockdown.
The fiscal support sought includes a ‘small amount’ of ₹10,000 crore towards proposed COVID-19 liquidity bridge required to give comfort to banks to restructure or provide additional loans to large companies whose balance sheets have been impaired due to the virus outbreak, the letter said.
"Government may need to provide for about Rs 30,000-40,000 crore as a guarantee to banks over a four-year period and in the current year, it can provide about one-fourth of that amount. This small amount will have a huge positive impact on these companies and their supply chain that includes several small and medium sized vendors, which otherwise may not survive the current crisis," the chamber added
There is also a need to create a self-sufficiency fund for innovation, construction and manufacturing clusters to make use of the emerging opportunities in the wake of disruption in the global supply chain, FICCI president Sangita Reddy wrote. The fund can be provided in tranches in the medium term, she said.
The problem being faced is largely that of liquidity and additional fiscal support is required for vulnerable communities over and above the sum provided for in the Garib Kalyan Yojana announced earlier, she said in her letter.
Fiscal support is also needed for micro, small and medium enterprises (MSMEs) to help them get back on track, she was quoted as saying by a news agency.
Besides, funds are needed for upgradation of healthcare infrastructure to effectively deal with the current situation and for support to sectors like aviation and tourism that have been hit hard due to the lockdown.
The fiscal support sought includes a ‘small amount’ of ₹10,000 crore towards proposed COVID-19 liquidity bridge required to give comfort to banks to restructure or provide additional loans to large companies whose balance sheets have been impaired due to the virus outbreak, the letter said.
"Government may need to provide for about Rs 30,000-40,000 crore as a guarantee to banks over a four-year period and in the current year, it can provide about one-fourth of that amount. This small amount will have a huge positive impact on these companies and their supply chain that includes several small and medium sized vendors, which otherwise may not survive the current crisis," the chamber added
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