Economy

CII calls for ₹3 lakh crore fiscal stimulus to boost demand

Our Bureau New Delhi | Updated on June 17, 2021

T V Narendran

Vaccine availability must grow twofold to provide at least one vaccine dose to all adults

The Centre must rollout a fiscal stimulus of atleast ₹3 lakh crore to boost demand in the economy that has been ravaged by Covid-19, the new CII President T V Narendran said on Thursday.

Also besides ramping up domestic vaccine production to atleast 175 crore doses by December 2021, India must achieve average daily vaccination of minimum 71.2 lakh doses between now and December 2021 to cover the entire adult population, Narendran said in his first press conference after taking charge as CII President on May 31.

“CII estimates that there is fiscal headroom of up to ₹3 lakh crore, and this amount can be channelised towards direct cash transfers to Jan Dhan accounts, higher allocation for MNREGA, short-term GST rate cuts and lower excise duty on fuel,” Narendran said.

Demand can also be revitalized through a time bound tax concession of interest rate subvention for home buyers, an LTC Cash voucher scheme as done last year and extending the Aatmanirbhar Bharat Rozgar Yojana till March 31, 2022, he said.

He also called for further expansion of the RBI balance sheet to meet the demand exigencies of the pandemic.

Narendran also pitched for an increase in the Emergency Credit Line Guarantee Scheme (ECLGS) corpus to ₹5 lakh crore along with the extension of the scheme till March 31, 2022.

The Centre should also appoint a Minister of Vaccination to accelerate the vaccination program and procure and distribute vaccines to states based on set criteria, he added.

“The government should fast track all necessary licensing requirements and pay in advance for purchases, besides providing capital subsidies to incentivise production. It should also urge the IP owners of vaccines to issue licenses for mass manufacturing with transfer of technology,” Narendran said, adding that vaccine availability must grow twofold to be able to vaccinate all adults with at least one dose by the end of the year.

Sky-rocketing retail prices of petrol and diesel need to be stabilised to keep economy-wide inflation in check, he said. “India has been blessed with relatively low oil prices over the last few years, which gave the government an opportunity to raise taxes and get revenue. This may be a time to give some of that back,” Narendran added.

In the medium term till 2025-26, CII expects India’s GDP to grow at 6.5 per cent annually, assuming that most of the population would have been vaccinated with both doses of the vaccine by 2022.

Published on June 17, 2021

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