COVID-19: India Inc assists government in reviving economy

Last updated on February 13th, 2023 at 03:56 pm

It has been more than a month since the businesses and industrial activities were stopped in the wake of the nationwide lockdown. Amid the fight against the Coronavirus pandemic, India can witness a phase of economic downturn that it has not seen in decades. Taking cognizance of the situation, the Modi government has been seeking suggestions from various industry stakeholders in order to reinstate the economy.

As per media reports, the government is seeking ideas and proposals on cutting duties and GST rates, improving liquidity, expediting all funds, and an interval on tax scrutiny and searches till the end of the year. The Centre has also urged officers across ministries and departments to carry out a SWOT analysis of the course of action to revive the economy.

India’s industry chambers such as the Federation of Indian Chambers of Commerce & Industry, the Confederation of Indian Industry (CII) and the Associated Chambers of Commerce and Industry of India have also proposed ideas new rules and regulations to the government to facilitate smooth and staggered functioning of the industries after the lockdown is lifted. The CII had called for a government stimulus, particularly for the MSME (Micro, Small & Medium Enterprises) sector. Some of the suggestions accumulated by the government officials from India Incorporated include giving special permission to auditors to move during lockdown with the results season coming up. Furthermore, there is a demand for speeding up all tax refunds to improve liquidity.

A majority of senior executives across industries are expecting that recovery from economic ramifications of COVID-19 pandemic will take longer than what was initially envisioned. Considering this, for most of them, business continuity and survival and mitigation of impact is the foremost concern to be addressed.

Earlier, the government had announced a stimulus package of 1.70 lakh crores. After the recent meeting between Finance Minister Nirmala Sitharaman and PM Modi, India Inc is awaiting a second stimulus package soon.

Without a government stimulus, industries are in disarray due to economic slowdown which is leading to layoffs and salary cuts in various sectors. At a time when the government is working on its exit strategy from the lockdown, top management of India Inc had also warned the Centre of the impending depression in the economy. The CEO’s of the top Indian companies have been working on an approach to adjust to a new normal in the industry post-COVID-19 lockdown.

Read: India’s COVID-19 battle can alter its political discourse

Previously, in its report, the International Monetary Fund slashed India’s growth estimates for FY21 to 1.9% from 5.85 in January. In a recent report, Ind-Ra also cut India’s FY21 GDP growth to 1.9%, which is notably the lowest in 29 years.