Industry body Asocham has urged the Centre for a stimulus package of at least $200-$300 billion over the next 12-18 months to support the Indian economy.
In a 16-point agenda, the industry body recommended that the Centre institute a stimulus package of at least $200-$300 billion to "thwart one of the deepest global recession expected in the world's history".
According to Assocham Secretary-General, Deepak Sood, the chamber believes 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 $200 billion with an ability to go up to $300 billion, over the next 12-18 months.
He stated that out of the corpus, $50-100 billion cash needs to be infused in the system over the next three months, to arrest the loss of jobs and compensate for loss of income.
"It will be critical to ensure we proceed with three objectives i.e. immediate assistance to employees and labour through direct transfers and through employers, ensuring that companies have enough cash flow to survive the down turn, and finally stimulating demand and investment to revive the economy through fiscal and tax measures," the industry body said in a statement.
Besides, the industry body requested the government to modify the FRBM Act to consider the debt to GDP ratio as a metric and not fiscal deficit.
"The government needs to set an example for other businesses with no bills being unpaid for more than 15 days," Sood said, as per a statement.
"This will enormously help the credit cycle and will also bring down tender prices for everything."
With the deflation that is expected in overall demand, the government should implement the National Infrastructure Plan with no loss of time, once the lockdown is completed.
Some of the other key recommendations to the Finance Ministry include a one-time loan restructuring to all corporates assuming a principal repayment start date moving upwards from March 2021, NCLT provisions to be held in abeyance for 6 months and a further reduction of repo-rate by another 100 bps by the Reserve Bank of India.