Industry chamber PHDCCI on Thursday suggested to the government to announce a “substantial” stimulus package including banning steel exports to China, to support economic growth amid the re-emergence of Covid-19 cases.
It has submitted 17 recommendations to Finance Minister Nirmala Sitharaman on financial and structural support to micro, small and medium enterprises (MSMEs) such as extending the moratorium period and offering concessional rates of interest on borrowings.
It has asked for unhindered operations of all business and industrial operations across the value chain as any disruption could cause severe economic hardships, including reverse migration of labour.
“The industry body has recommended a substantial stimulus package to support the economy, trade, and industry in this extremely difficult time,” the chamber said in a statement.
Extension of ECGLS
The recommendations include extension of ECGLS (emergency credit line guarantee scheme) to March 31, 2022, with an increase in the amount from ₹3 lakh crore to ₹6 lakh crore. It has also suggested an increase in the limit of the ECGLS credit from the current 20 per cent.
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It added that the government needs to defer the show-cause notices being issued by the income tax department.
“No show-cause notices/income tax notices in respect of assessment may be issued until after the situation improves, as the taxpayer is not in a position to reply to such show-cause notices due to total paralysis of office work and also because the offices of the tax consultants are also closed,” it added.
Reduction in TDS
Further, the suggestions include reduction in the TDS rate for 2021-22 to the tune of 50 per cent; ban of exports of steel to China; imposition of 35 per cent export duty on steel; levy of uniform duty on all forms of iron ore exports, including pellets; and cut in GST rates for Ayush industry.
“The cash deposit limit may be enhanced to ₹10 lakh. Presently, there are charges on cash deposits in banks beyond the limit of ₹2 lakh. This will provide much-needed relief to the struggling population and provide some relief amidst the crisis,” it added.
Ramping up vaccine production
In a separate statement, the chamber said that there is an urgent need to ramp up the production of Covaxin and Covishield through voluntary licensing.
Voluntary Licensing refers to the authorisation given by the patent holder to a third party to manufacture and sell the patented product on the basis of mutually agreed terms.
“The second wave of Covid-19 pandemic is spreading faster than the first wave and affecting almost every household in India. At this critical juncture there is a need to urgently provide licensing of production of Covaxin, Covishield and Sputnik,” it said.
It added that compulsory licensing is another way of granting a licence by the government to a third party to use the patent; however, this may not be very useful in the case of manufacturing of technologically advanced Covid-19 vaccines.