NEW DELHI: Completely in the dark about the government’s intentions, the industry has pressed the panic button by pointing out that “time is running out for a fiscal stimulus package to rescue the economy”.
Seeking an immediate stimulus package of Rs 15 lakh crore, a senior industry official warned the government that “delayed fiscal relief for enterprises reeling under the lockdown will make it harder for them to recover”.
The industry is of the view that the government needs to proactively step in because the lockdown had lasted much longer than anticipated leading to a much bigger impact on corporate balance-sheets.
Interestingly, of the Rs 15 lakh crore sought by the industry, Rs 2 lakh crore is for cash transfers to the poor which would be in addition to the Rs 1.7 lakh crore stimulus already announced by the government.
It has sought another Rs 2 lakh crore to pay workers’ salaries and suggested that the disbursement be equal to the April-June wage bill of the borrowers, backed by a government guarantee, at 4 to 5 per cent interest.
An allocation of Rs 2 lakh crore should be made for bailing out state-run electricity distribution companies, suggested CII President Vikram Kirloskar.
For MSMEs, it wants a credit protection scheme that guarantees bulk of loan so that the risk to the lender is limited. In addition, CII has suggested the creation of a fund with a corpus of Rs 1.4-1.6 lakh crore to subscribe to corporate bonds.
The fund can be seeded by the government with a corpus of Rs 10,000-20,000 crore, with further investments from banks and financial institutions.
It has also sought Rs 2 lakh crore for bank recapitalisation and Rs 4 lakh crore in support from the subscription of government paper by the RBI.