Lending support to the extended lockdown with graded relaxations to deal with the Covid-19 crisis, the ASSOCHAM has urged the government to immediately announce an aggressive fiscal stimulus to mitigate the economic pains from the pandemic.
“’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,” Deepak Sood, secretary general of ASSOCHAM, said.
The disruption has started causing livelihood concerns for millions of workforce – both in the formal and informal sectors, he said.
“Businesses across different sectors, be in hospitality, construction, logistics, manufacturing and trade find themselves locked up in grave financial woes,” Sood said.
He said the fixed costs, such as wages, electricity, rentals, communication are hard to meet even as the operational losses are inevitable.
“Such a dire state of affairs demands a large sized fiscal stimulus even if it requires monetisation of fiscal deficit by direct lending by RBI to the government,” Sood said.
He said the ASSOCHAM has been suggesting a graded opening up of the economy.
However, 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, Sood added.
Already, the required manpower is difficult to find for running the supply chain of essential goods, mainly for the transport sector and mandis.
Sood expressed hope that the fiscal stimulus would be all-encompassing to include reduction in GST, government guarantee to banks for lending to weaker businesses, release of all government dues and restructuring of the loans.