Despite the devastating second wave of COVID-19, the level of hope among Indian industry is high. Recently, India’s GDP growth rate for FY 2021-22 will be 9.5 per cent, predicts President, Confederation of Indian Industry (CII), T V Narendran.
At his first media interaction as President, Confederation of Indian Industry (CII), T V Narendran said, “Ultra-high frequency indicators strongly presage growth recovery following the second wave of the pandemic. With recent uptick in mobility indicators, traffic congestion index and daily railway passenger movement, we believe that 9.5 per cent growth rate can be achieved this year.” He took charge as President, CII on May 31, 2021.
Narendran, CEO and Managing Director of Tata Steel, added, “The cumulative impact of the two waves on incomes and consumer sentiment, coupled with the increase in household medical expenses in the second wave, is likely to affect consumer demand for some time.”
The new president said suitable fiscal measures to alleviate the stress of people impacted by the second wave of COVID-19 are the need of the hour.
CII estimates that there is fiscal headroom of up to Rs 3 lakh crore and this amount can be channelised towards direct cash transfers to the vulnerable people, higher allocation for MNREGA, short-term GST rate cuts and lower excise duty on fuel. In other words, the industry body stated India requires a Rs 3 lakh crore fiscal stimulus.
"Fiscal stimulus of Rs 3 lakh crore is required. There is room for administering additional fiscal stimulus of up to Rs 3 lakh crore," he said adding the RBI should expand its balance sheet in order to accommodate the increased stimulus so that lending costs remain contained.
The Indian economy is a consumption-led economy and the pandemic has impacted consumer demand and due to this, the chamber has called for measures such as cash transfer as a number of actions are needed to deal with this demand shock, he told reporters.
Measures suggested by it include enhanced MNREGA allocations from the budgeted amount; short-term and focused GST cuts to boost demand; time bound tax relief/interest subvention/stamp duty concession for home buyers; LTC cash voucher scheme like last year; and extension of the Atma Nirbhar Bharat Rozgar Yojana till March 31, 2022.
Narendran also asked for ensuring timely payment to companies including MSMEs; accelerating public works programmes to ensure implementation of NIP; hiking ECLGS (Emergency Credit Line Guarantee Scheme) amount to Rs 5 lakh crore, reduction in excise duty on fuel and inclusion of ATF (aviation turbine fuel) and other fuel products in GST (Goods and Services Tax).
On vaccination, he said there should be a minimum 71.2 lakh average daily vaccination doses from now till December 2021 to cover the entire adult population.
"The Vaccine Czar (or minister) should be empowered to undertake actions like in the UK on a daily campaign to track domestic vaccine production and import supplies; equitable distribution of vaccines among states; track progress on vaccine deployment and administration; and using a dashboard approach and share progress reports daily," he said.
Further, he said the government should implement the reform agenda envisaged in the budget, including dealing with the problem of bad assets; re-capitalize public sector banks to help them brace for the impact of higher NPAs and meet credit need of industry as the economy reopens; and create a pandemic pool to cover risk of losses due to any future pandemics.