Industry needs stimulus package of Rs 9-Rs 10 lakh cr: FICCI survey

The Indian industry requires an immediate stimulus package of Rs 9-Rs 10 lakh crore, which would account for 4-5 per cent of the country's GDP, to recover from the impact of the coronavirus crisis and the ongoing nationwide lockdown, according to a survey by FICCI.

The report noted that other countries have also taken similar steps. The debt-to-GDP ratio of India is manageable, it added.

"This money to be injected for relief & rehabilitation across all levels of the economy including people at the bottom of the pyramid, informal workers, micro, small and medium enterprises and large corporates," it said.

The industry body has also suggested setting up of a 'Bharat Self-Sufficiency Fund' with an outlay of Rs 2 lakh crore. It said that the fund could be used to promote scientific research and innovation for building a stronger and resilient nation and creating self-sufficient industry clusters with fully developed value chains within the country for products where India has high import dependence.

It said that given the complete breakdown of businesses there is a need to assess the situation and if required the timeline for loan moratorium should be extended.

"Provide greater regulatory forbearance including change in NPA definition and loan restructuring etc. NPA recognition period to be extended from 90 days to a minimum of 360 days," it said.

The survey also suggested that all tax payments including GST payments should be deferred by six months without inviting any penalty.

"Bank guarantees should not be encashed (all industries under Force Majeure); an extension of minimum 6 months to be given. This should also be extended to stressed asset funds," it recommended.

It also suggested that the government departments and PSUs should ensure that all pending payments to industry are cleared immediately.

Further, refunds including payments to hospitals from CGHS, ESI etc. must be cleared immediately. All drawbacks and tax refunds including GST refunds should be cleared at the earliest

The survey also recommended that interest free and collateral free loans be given to MSME companies, with a turnover of less than Rs 500 crores for a period of upto 12 months depending on the sector to enable them to cover fixed costs, salaries and other operational expenses.

This loan can be given with pre-conditions that businesses will continue to run and there would be no layoffs of workers and after one year it will be converted into a grant if all conditions are met.

It also said that a moratorium should be extended for loans taken from mutual funds and insurance companies.

The survey comes at a significant juncture as a stimulus package for the industry and businesses is being prepared under Finance Minister Nirmala Sitharaman.

She has already announced a Rs 1.7 lakh crore package for the poor and migrant workers under the Prime Minister Gareeb Kalyan Scheme.