Enhancing credit delivery and boosting investments in infrastructure development crucial to induce demand : PHD Chamber

No.PR-129 June 13, 2020 New Delhi Enhancing credit delivery and boosting investments in infrastructure development crucial to induce demand : PHD Chamber Industry body PHD Chamber of Commerce and Industry organized a Webinar on 20 Lakh crore Stimulus Package: Growth Prospects of Indian Economy in COVID-19 and Post COVID-19 Scenario today. Eminent Economists Dr Ashima Goyal, Member of Economic Advisory Council to the Prime Minister & Professor, Indira Gandhi Institute of Development Research, Prof N R Bhanumurthy, National Institute of Public Finance and Policy (NIPFP), Prof Ram Singh, Department of Economics, Delhi School of Economics, University of Delhi and Shri T K Arun, Editor, Economic Times participated in the Webinar on 20 Lakh crore Stimulus Package: Growth Prospects of Indian Economy in COVID-19 and Post COVID-19 Scenario on 13 June 2020. They were of the view that enhancing credit delivery and boosting investments in infrastructure development are crucial to induce demand. Further, sequencing of mega economic stimulus package of Rs 20 lakh crore is also important to have its effective impact on various segments of the economy, said Industry Body, PHD Chamber. Dr Ashima Goyal, Member of Economic Advisory Council to the Prime Minister & Professor, Indira Gandhi Institute of Development Research, said that the large economic loss due to COVID-19 will pass soon as it is temporary in nature and result of a natural shock. In regard to high frequency data, she mentioned that there was recovery in some indicators, stock market has somewhat recovered, there is a rise in demand for consumer durables, among others. Further, she was of the belief that the package should be seen with the aspect of sequencing of measures as the lockdown has affected the supply side much more than the demand side. She opined that with the phased lifting of the lockdown, there will be focus on more direct demand measures in the coming times and spending on infrastructure development will be boosted. Prof N R Bhanumurthy, National Institute of Public Finance and Policy (NIPFP), mentioned that India was already experiencing a slowdown in pre COVID-19 period, which has been further aggravated due to emergence of COVID-19 and resultant lockdown. While appreciating the measures taken by the Government in areas of agriculture, defence, opening of strategic sectors, among others, he stated that these measures will help economy in medium and long term. He suggested that there is a need to focus on tackling with short term demand side situation, handhold the State Governments and focus on achieving US$ 5 trillion economic size in the coming times. Prof Ram Singh, Department of Economics, Delhi School of Economics, University of Delhi, said that our country has been impacted due to the lockdown period. While talking about the economic scenario, he stated that several national and international agencies have reduced India’s growth forecasts, investments have come to a halt, consumer & non consumer durables have taken a hit, among others. He mentioned that the economic scenario due to COVID-19 started as a supply side problem, which has now transformed into demand side problem. Going ahead, effective implementation of reforms and spending on building infrastructure at ground level will help in mitigating the impact of pandemic COVID-19 Shri T K Arun, Editor, Economic Times said that it is essential that hospitals are been built, manufacturing of PPE kits and other consumables should be seen as growth opportunities. He said that there is a need to create bad banks for buying bad loans of banks. He said that investment infrastructure needs to step up and create a viable and functional bond market. He opined that health infrastructure is crucial at this juncture and bank lending should be promoted to boost industrial and investment activities in the economy. Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry in his presidential address appreciated the mega economic stimulus package of Rs 20 lakh crores and relief measures announced by the Government. He added that the reforms announced by the Government will strengthen the various segments of the economy and socio-economic development in the country and lead to meet our objective to become a self-reliant country going forward. PHD Chamber of Commerce and Industry has earlier suggested a stimulus package of Rs 16 lakh crores to help the economy to grow and survive the wave of pandemic COVID-19. However, we highly appreciate the bold stimulus package of Rs 20 lakh crore announced by the Government at this juncture to mitigate the daunting impact of pandemic COVID-19 on trade and industry said Dr Aggarwal. Shri Sanjay Aggarwal, Sr Vice President, PHD Chamber stated that credit delivery must be promoted; direct benefit transfer should be encouraged along with reviving demand in the economy. He stated that there is a need to develop soft infrastructure along with hard infrastructure. He also mentioned that the announcement on removing the norm for farmers to sell agriculture produce only to licensees in APMCs is appreciable as it will provide adequate choices to them to sell their produce at attractive prices in a common market. He urged that money should be provided to states /local municipalities for the socio-economic development of the economy. Further, there is a need to double the number of doctors, nurses, paramedics, medical colleges and train them to provide much needed push to the economy. Dr Lalit Khaitan, Chair, Economic Affairs Committee, PHD Chamber said that Rs 20 lakh crore would change the curve of economic development and will move towards reviving growth, infrastructure development, reaping demographic dividend, demand and technology driven. He appreciated Hon’ble Prime Minister’s vision of being vocal for local, reforms for doubling farmers’ income by 2022, liquidity provision for NBFCs, among others. The reforms and relief measures provided by the Government will go a long way to make Atmanirbhar Bharat. Ms Yashika Singh, Co-Chairperson, Economic Affairs Committee said that the government’s policy support has been reasonably well timed, as well as calibrated to the evolving conditions. We are hopeful that the policy focus on self-reliance is likely to give a fillip to overall manufacturing in India that in turn will benefit the SMEs through the value chain linkages. Other esteemed speakers were Shri Saurabh Sanyal, Secretary General, PHD Chamber who opined that there is a need to speed up health infrastructure development and attract investments in various sectors of the economy. While, Dr S P Sharma, Chief Economist, PHD Chamber moderated the session and stated that India’s participation in global GDP will increase with improvement in ease of doing business and significant reforms undertaken by the Government in the coming times. Ends. Media Division PHD Chamber of Commerce and Industry