Economy

Finance Minister assuages CEOs’ fears of a full lockdown

Our Bureaus Delhi/ Chennai/ Kolkata/ Bengaluru/ Mumbai | Updated on April 20, 2021

Finance Minister Nirmala Sitharaman   -  -

Calls 25 entrepreneurs on Sunday for meeting

It was a busy Sunday for Finance Minister Nirmala Sitharaman as she worked her phone all day to reach out to entrepreneurs and industrialists across the country. She did this to calm their nerves, brief them about the steps the government is taking to tackle the raging pandemic and most importantly, seek their views on the best possible way to manage the ‘life vs livelihood’ conundrum. And, if more stringent containment measures become necessary, how best can they be applied without hurting the economic activity.

The Minister reached out to over 25 CEOs/industrialists including Uday Kotak, MD, Kotak Mahindra Bank and CII President; A M Naik, Group Chairman L&T; Pawan Munjal, MD, Hero MotoCorp; R C Bhargava, Chairman Maruti Suzuki; Venu Srinivasan, CMD, TVS Motor Company; Rajesh Gopinathan, CEO, Tata Consultancy Services; Srivats Ram, MD, Wheels India and President, Madras Chamber of Commerce and Industry; Deb Mukerjee, President, Bengal Chamber of Commerce and Industry; and T V Mohandas Pai, Chairman, Manipal Global Education Services; also TVS Capitals’ Gopal Srinivasan, Apollo Hospital’s Sangita Reddy, and Thiagarajar Mills’ Karumuttu Kannan.

Each conversation lasted between eight and 15 minutes and Sitharaman, after initial explanation of the steps taken by the government, listened to what the industrialists had to say on their preparedness in dealing with this crisis and the way forward.

A cross-section of CEOs and industrialists that BusinessLine spoke to said the conversation mainly revolved around the lockdown. Bhargava told the Finance Minister that a lockdown is not a solution for dealing with the Covid-19 spread.

“Taking the lesson from the last shutdown, it is not in the interest of the people or the country that economic activities come to a stop. It causes immense hardships, especially to the poor people/daily workers who lose their jobs,” he said about his conversation with Sitharaman.

Deb Mukherjee echoed Bhargava’s views. He told the Minister that another lockdown will not just impair businesses but also undermine the confidence the industry is in the process of regaining.

Most CEOs (barring one who was agreeable to a short total lockdown, if necessary) suggested that if a harsher containment strategy was necessary, creating localised containment zones and locking them down would be a better solution than a full-blown shutdown.

The Finance Minister, for her part, informed them that the Centre is not considering a national lockdown and is already urging the State governments to go for localised lockdowns, if need be.

‘Micro-containment’

Assocham President Vineet Agarwal thanked the government for not considering a national lockdown. He told the Finance Minister that supply chains are intact during the current second wave because of the micro containment strategy which had ensured that factories remained running. The conversation also touched upon other issues.

Mohandas Pai sought more confidence measures through fiscal relief for the middle class as they are the major taxpayers numbering over 6 crore. They are the ones who have lost jobs and incurred huge costs on healthcare. I have suggested to the finance minister that there be three tax slabs and no surcharges - ₹0-5 lakh (Nil tax), ₹5-10 lakh (10 per cent), ₹10–15 lakh (20 per cent) and over ₹15 lakh (30 per cent) without any deductions. He also suggested Production-Linked Incentive Scheme for start-ups and unlisted companies.

Thiagarajar Mills’ Kannan told Finance Minister about how consumer confidence is taking a beating in the country and hurting domestic demand.

“We suggested measures such as availability of liberal lines of credit, support to the individual consumers, among others to overcome the crisis during this time besides ramping up medical efforts,” he said.

Sudhir Kapadia, EY India national Leader -Tax and President, Bombay Chamber of Commerce and Industry suggested offering soft loans directly to private vaccine manufacturers to enhance their production capacities.

Published on April 19, 2021

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