Humankind is fighting a battle unforeseen in its existence. History is marred with massive pandemics, but the scale of devastation of the Coronavirus outbreak is unprecedented owing to the interconnected global market.
In these trying times, the Confederation of Indian Industry (CII) stands firm with the nation, industry, and the government to steer the health and economy of the nation back on track. It has suggested policy redressal measures, both on the fiscal and monetary fronts, to tackle the repercussions of shutdown due to COVID-19.
CII has appealed to corporates to retain employees and particularly safeguard informal workers as they constitute a major part of the workforce. To strengthen the fight against Coronavirus, CII has urged industry to proactively manufacture ventilators, masks, sanitisers, and medical supplies at affordable costs.
CII has also prepared a list of private hospitals and the number of isolation beds in 20 states that the hospitals are ready to provide voluntarily. Private laboratories have come forward to provide mass scale screenings.
On the fiscal front, CII has put forth a proposal to provide a fiscal stimulus of ₹ 2 lakh crores (one per cent of GDP) in the hands of people through Aadhar based Direct Benefit Transfer. The government could also bring some changes in the tax structure such as waiving taxes for the most distressed sectors like MSME, aviation and hospitality, among others. A grace period of 30-60 days could be provided in utility, statutory and GST payments. CII has also recommended allowing companies to give advance CSR funds of the next two years towards Prime Minister’s Relief Fund to aptly fight the pandemic.
CII has requested to allow extension of various due dates such as filing GST returns, refunds, and adjournment of proceedings. Reduction of GST rates on sanitisers, medical equipment, medical drugs would provide much-needed relief to the citizens. CII welcomes announcements made on 24 March by the Finance Minister to extend last date for payment of taxes and reducing interest due on late payments.
On the monetary side, CII has advocated for the reduction of repo rate and cash reserve ratio by 50 basis points. Moratorium on debt repayments and redefinition of NPA recognition is suggested to be examined to provide relief to enterprises.
CII, in its sectoral recommendations, has brought forth issues that could revamp the Indian industry and make it self-sufficient.
The pharmaceutical industry is heavily dependent on imported Active Pharmaceutical Ingredients (APIs) and intermediates primarily from China. Indigenous production of APIs and intermediates could not only reduce the imports but also make us ready for times like such when the global supply chain is disrupted. CII has suggested creating large API parks with fiscal incentives and supportive infrastructure.
The tourism and aviation sector has been heavily hit by the COVID-19 outbreak. CII feels that more than half of the tourism and hospitality sector could become sick with a possible loss of over 2 crore jobs.
Moratorium on working capital loans and interest payments, GST refunds on cancelled events and extension in export obligation under the EPCG scheme would provide succor to the sector.
With flights grounded, the stress on the sector is severe. CII has called for relief on air navigation service charges and rebates on landing, parking and housing charges for 6 months. The government could provide subsidy packages and tax/fee rationalization to avoid distress if the current scenario persists.
Social distancing is the keyword for containing the virus. As people are advised to limit their travel, the e-commerce sector could play a catalytic role in avoiding the disruptions caused in daily lives. CII has recommended the deliveries of the sector to be treated as an essential commodity sector, including the traditional offline logistics services. It has advocated for the manufacturing plants, and food delivery services to be kept open under strict safety and hygiene guidelines and be treated as an essential business exemption.
IT/ITES sector would be core to the functioning of the industry as most of the employees need to work from home. But to meet government, regulatory, and data protection obligations, there is also a need for some employees to work from the office. CII has urged high quality and reliable broadband connectivity and power supply to avoid any disruptions.
The COVID-19 pandemic is a health emergency and is different from the earlier disruptions on the economic front. We need to re-evaluate our policies and strategies to not only combat the pandemic but protect our economy as well. CII is constantly engaging with Government and industry to provide inputs for managing this crisis situation on a real-time basis.