Coronavirus in Mumbai: Industry bodies press for stimulus to overcome losses

Coronavirus in Mumbai: Industry bodies press for stimulus to overcome losses

They have pressed for a stronger stimulus rather than a more modest one to help stressed businesses and individuals tide over the current economic situation and progress towards recovery.

Sanjay JogUpdated: Tuesday, March 24, 2020, 07:53 AM IST
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Industry | Xinhua/Liang Xu

Mumbai: Leading industry bodies including CII, FICCI, Assocham, IMC on Monday have urged Prime Minister Narendra Modi to take a slew of steps to alleviate economic distress for businesses and less privileged individuals due to COVID-19.

They have pressed for a stronger stimulus rather than a more modest one to help stressed businesses and individuals tide over the current economic situation and progress towards recovery. They insisted that the measures should be implemented on a war footing by Reserve Bank of India (RBI) and by the Central Government.

The industry bodies have suggested that the RBI needs to cut CRR by 1%, reduce repo rate by 1% and reverse repo rate by 1.50% to discourage banks from lazy banking by putting deposits with RBI. They viewed that reduction in CRR by 1% will make available Rs 1.39 lakh crore to banks to lend and improve profits.

Further, the cut in SLR by 2% will free up about Rs 2.78 lakh crore. These demands were made when the Centre has set up a panel headed by the Finance Minister Nirmala Sitharaman to suggest measures to tide over the present situation.

IMC Chamber of Commerce and Industry President Ashish Vaid told FPJ,’’ The Government needs to reduce GST rate on autos, cement to 12% from 28% and on hotels to 12% from 18%. Additional depreciation on automobiles for FY 2021 may be allowed.

The dividend tax should be maximum 20% for the recipient, or a lower rate if the recipient is in a lower bracket.’’ He said all losses should be allowed set off against any income and business establishments should be advised not to resort to lay off or retrenchment.

Two months’ salary can be provided as a loan at the Repo Rate to be paid off in one year. Further, the industries bodies urged the government to provide income support on the lines of PM Kisan Yojana. They have suggested an amount of Rs1,500 to everyone identified and credited through Jan Dhan Bank account

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