Indian industries were staging a slow recovery when the COVID-19 outbreak forced many to shut operations. In this time of crisis, corporate India is looking for government support. India’s Finance Minister Nirmala Sitharaman has promised a stimulus package and details about the same are awaited. What is most needed is increased government spending and relief in terms of loan repayments which will ease the liquidity situation and help businesses restart operations after the lockdown ends.
Voicing the concerns of industries in the state of Maharashtra, Pradeep Bhargava, Director of Persistent Systems and president of Mahratta Chamber of Commerce Industries and Agriculture (MCCIA) spoke to Davis Index on what the industry expects from the Indian government.
“First, the government should clear its payments backlog. All payments due to suppliers, contractors should be cleared. Second, it should fast track big-ticket infrastructure spending. Government should direct banks to go liberal with the credits, offer more credits, reduce interest rates and give moratorium for payment of interest,” said Bhargava.
Auto hub located in Pune, Maharashtra is home to many leading automobile manufacturers including General Motors, Volkswagen, Mahindra and Mahindra, Tata Motors and Bajaj Auto. These automakers were initially hit by a spare parts shortage from China and now are shut until April 14, following government’s lockdown order. Several small and medium-sized auto ancillary manufacturers are also badly hit this situation.
Bhargava rued the fact that the government has so far not announced any measures like tax deduction or huge investments in infrastructure projects which will provide the necessary impetus for economic revival. He added that a team of academicians, industrialists and economists are helping the Economic Task Force appointed by the Prime Minister’s Office to draft a stimulus package.
Earlier, on Tuesday, the finance ministry had announced some measures such as extension of tax filing deadlines and relaxations of compliance and insolvency norms. On Thursday, the government announced Rs1.70 lakh crore ($22.62bn) crore food security and income support package for the weaker sections of the society.
($1 = Rs75.23)