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NEW DELHI :
Prime Minister Narendra Modi extended the curves across the country until May 3 to control the coronavirus outbreak, amid growing demand that the government quickly announce a stimulus package to cushion the devastating economic impact of the blockade in companies and people.
The government is also considering the benefits of partially resuming economic activity, including opening certain sectors starting April 20, to ease the difficulties of daily gambling, farmers and small businesses.
Several forecasters have already dramatically lowered estimates for India’s economic growth in 2020-21, with the latest from Barclays setting it at zero. According to estimates from the Indian Economic Monitoring Center, unemployment rose to 23.4% in the week ending April 5. A calibrated exit from the blockade, along with a massive fiscal stimulus, is considered essential to survive the severe coup of covid-19.
Although a zoned plan to ease closure restrictions is expected on Wednesday, India’s top business leaders said a timely stimulus package will not only rescue thousands of companies from collapse but will also save millions of jobs.
“We are pleased to see the relaxation of restrictions in green areas and we hope that the government will also announce the economic stimulus package soon so that we can begin to focus on rebuilding the economy. Saving lives and livelihoods has to go hand in hand, “said Deepak Parekh, president of Housing Development Finance Corp. Ltd, India’s largest mortgage lender, on Tuesday.
Modi’s administration faces the lousy choice of having to push more than 400 million informal sector workers into poverty through a protracted blockade, or risk losing thousands of lives by letting the deadly virus spread out of control.
The decision to extend the blockage comes as infections have steadily increased, despite stringent home stay rules for the past three weeks.
India reported 11,275 coronavirus infections and 378 deaths as of March 14, data from the health ministry showed.
Presenting a case for a small business rescue package, Chandrajit Banerjee, CEO of the Confederation of Indian Industry, said: “With limited resources, (they) do not have the ability to withstand massive shocks like covid-19. The health of these companies influences the entire supply chain, including large companies. “
As economists and business leaders seek a ₹From 9 to 10 trillion stimuli to support growth and jobs, the government is almost ready with a set of “provisional” measures for the sectors most affected by the outbreak of the virus, according to a government official who spoke on condition of anonymity. .
The government is expected to announce measures for small businesses and aviation, the official said.
“The provisional measures will ensure that there are no payments or quotas pending from the government side. This will ensure there is no cash crisis, “the official said, adding that the measures are likely to be announced this week and a possible larger economic stimulus once the blockade is lifted.
Extending the blockade would further reduce the economy, but if the virus transmission chain breaks, India would be in a better position for a quick rebound, said Sanjay Kirloskar, president and managing director of Kirloskar Brothers Ltd. “India is still watching a growth in the number of infected, indicating that the worst is not yet over. “
Pawan Goenka, Managing Director, Mahindra and Mahindra Ltd agreed. “It is up to all of us to make sure that the prime minister doesn’t have to extend it further,” he said.
What is needed right now is a set of survival measures, said former Indian chief statistician Pronab Sen. “We have to think of two types of survival: one, people who do not have money to buy food or medicine and the second. , of companies. We need to keep both of us alive, “said the senator.
Up to 40 million jobs are at risk during the April to September period. “Therefore, an urgent aid package is critical,” Sangita Reddy, president of the Federation of Indian Chambers of Commerce and Industry, said in a statement after the Prime Minister’s speech to the nation. Reddy said a gradual opening of the economy will help start production activity to ensure there is no shortage when the blockade is lifted.
