Indian Chamber of Commerce suggests policy interventions to counter COVID-19 impact

Our Bureau Mumbai | Updated on March 20, 2020

The Indian Chamber of Commerce has urged the Centre to announce a stimulus package aimed at increasing the spending power of consumers.

"With the outbreak of the COVID-19 pandemic, economies and financial markets across the world are in a tailspin. The need of the hour is to continue with innovative steps and deliver growth supportive measures to support financial markets and the real economy through coordinated policy actions," ICC said in a press release.

ICC has shared with the Government the suggestions of a survey of its members. The suggestions include stimulus to increase the spending power of consumers; allowing companies the option to restructure loans for one year without additional charges; and relaxation of NPA norms for 6 months so that default will be eligible for being termed as a NPA account.

Further, banks should enhance working capital limits up to 20 per cent of existing limit to ensure funding of inventory pile-up. This will be subject to companies being able to provide sufficient drawing power to banks.

Allowing interest subvention on working capital limits by 2 per cent per annum to all industry players for 6 months, to balance the extra interest cost incurred in holding extra inventory.

To ensure that job losses do not happen, RBI should allow corporates a one-year moratorium to allow them enough time to manage cash flows until the crisis blows over.

A mortgage holiday for a specified period of one year. Suitable cut in policy rates so that consumption and investment do not come to a standstill

Across-the-board reduction of GST rates, cutting fuel prices and specific relief to sectors such as travel & hospitality, retail and entertainment directly affected by the coronavirus.

"All the above requested measures are temporary till the global markets stabilise in 3 to 6 months and will give a boost to the economy," said Mayank Jalan, President, Indian Chamber of Commerce

Published on March 20, 2020

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