New Delhi: Industry has welcomed the Union government’s decision to allow opening of most of the private offices, IT firms, data and call centres among others during the extended lockdown period that will be in force till May 17. Despite relaxations major part of the economic activity will remain affected, said industry lobby groups, adding that an economic stimulus package was urgently required to help the industry, particularly the MSME sector.
“The extension of the lockdown period for a further period of two weeks from May 4, with the new guidelines…will allow a calibrated opening of the economic activities,” said Dr Sangita Reddy, President of FICCI.
She, however, said that despite these relaxations, a significant part of the economic activity would still remain suspended.
In its lockdown extension order, the ministry of home affairs permitted manufacturing of essential goods, drugs and pharmaceuticals, medical devices and their raw material and intermediates.
The MHA also allowed those industries which require continuous process, and their supply chain, in addition to permitting the operation of jute industry, IT hardware and packaging material companies.
“The relaxation to many industrial activities including SEZs, industrial estates and industrial townships…is absolutely in line with what CII had been asking for and we especially welcome it,” said Chandrajit Banerjee, Director General, CII.
He said the decision to permit private offices to operate at one-third strength would enable many service companies to reopen.
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While welcoming the government’s decision to resume the economic activity in a graded manner, Assocham demanded immediate announcement of an aggressive fiscal stimulus package.
''The government's strategy to build on the gains in the form of containment of Coronavirus is understandable and must be supported, but the 40-day lockdown has resulted into a massive economic disruption,” said Deepak Sood, Secretary General of Assocham.
Industry flags shortage of manpower
Deepak Sood also highlighted the shortage of work force as the Union government Friday started running specials trains to take the stranded migrant labourers to their home states.
“The issue of migrant labour needs to be cautioned with utmost care, because once the workers are migrated to their native places, it would be difficult to recall them,” Deepak Sood pointed out while highlighting the problems faced by the companies in maintaining the supply chain of essential goods.
Industry demands fiscal stimulus
The three industry lobby groups, CII, FICCI and Assocham reiterated their demand for a fiscal stimulus package to help the industry and businesses tide over the slowdown in the economic activity caused by the outbreak of COVID-19 global pandemic.
The highly infectious virus has killed more than 1150 people in the country and more than 2,37,000 people around the world, causing unprecedented disruption in economic activity that is expected to cause a loss of $9 trillion to the world economy.
While FICCI President Sangita Reddy said it was the right time for a financial package, especially for the MSMEs, CII suggested a government spending package equivalent to 3% of the GDP which would add Rs 6 lakh crore to the available firepower.
“With restricted economic activities, a quick and forceful economic support package for industry is even more compelling now,” said Chandrajit Banerjee of CII.
In a statement sent to ETV Bharat, Assocham’s Deepak Sood expressed hope that the fiscal stimulus would be all-encompassing, including a cut in GST rates.
Sood said the government should release all its dues and give guarantee to banks so that they can lend to weaker companies and restructure existing loans.
(Article by Krishnanand Tripathi)
