Industry bodies are seeking relief measures from the government to help businesses deal with the impact of the coronavirus pandemic.
While Assocham called for a moratorium for debt servicing, reduction of interest rates across the businesses and rescheduling of loan payment among other things, CII has sought a six-to-nine months moratorium on working capital facilities for the tourism and hospitality sectors.
“These measures, implemented on an urgent basis, have the potential to prevent the grave economic crisis which is on the horizon. It is no longer about investors and business, this is about the economic health of the country,” said Niranjan Hiranandani, President, Assocham.
India being the fifth largest economy in the world cannot be seen lagging in taking the necessary measures. The time is ripe for the RBI to roll out monetary/fiscal stimulus to prevent businesses from going bankrupt, he added.
According to a FICCI survey, the operations of 53 per cent of Indian businesses were heavily impacted by the spread of the virus. The companies also mentioned that while they are closely monitoring the situation, they expected the impact of the pandemic on supply chain to worsen.
The survey titled, ‘Impact of coronavirus on Indian businesses’ mentioned that around three-fourths of the businesses which were part of the survey indicated big reductions in orders and 80 per cent reported a decrease in cash flow.
A total of 317 companies participated in this survey which was conducted between March 15-19.
However, almost four-fifth of the respondents believe that the situation would come under control by six months.
Meanwhile, Vikram Kirloskar, President of CII, has asked its members not to retrench workers, especially of blue collar and contract workers, as it will add to their economic challenges.
“It is for us in the senior management to explore ways to reduce costs. One possible direction could be to take a pay cut for top leadership of the company,” added Kirloskar.
For the tourism and hospitality sector, the CII recommendations include six to nine months’ moratorium on all working capital principal and interest payments on loans and overdrafts for easing the liquidity situation.