PHD Chamber appreciate reform measures to remove Pandemic COVID-19, expect financial stimulus to trade and industry


March 26, 2020

New Delhi PHD Chamber appreciate reform measures to remove Pandemic COVID-19, expect financial stimulus to trade and industry

While worrying about the severity of pandemic COVID-19 increasing each day across the world, Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry said in a press statement issued here today that we are thankful and appreciate the Government for taking timely action and measures to remove pandemic COVID-19 from the country. We all are confident that India will win this battle against pandemic COVID-19 and the situation so far seems under control as the pandemic COVID-19 mortality rate is 2% of the infected cases in the country, said Dr Aggarwal. Around 195 countries including China, Japan, USA, Italy, Spain, UK, among others have been severely impacted. The whole mankind in the world is in huge problem and uncertainty about the severity and spread of pandemic COVID-19, said Dr Aggarwal. There is a multi-speed spread and recovery of the pandemic COVID-19. Countries such as Italy and Spain are facing high rate of pandemic COVID-19 mortality rate of the infected people whereas USA witness 1.2% and Canada only 1%, said Dr D K Aggarwal. Accordingly, impacted countries are providing relief to the people and trade & industry with financial stimulus along with various reform measures to rejuvenate their respective economies, said Dr Aggarwal. We appreciate the financial package of Rs 1.70 lakh crore by the Government of India under different schemes like the Ujwala yojna, Annadatta yojna, additions in Jan Dhan Yojna,among others, for the poor, needy, front line workers, among others, said Dr Aggarwal. Considering the severe impact of pandemic COVID-19, we suggest the government to provide a financial package which should support the businesses in terms of availability of liquidity, working capital and to meet up the maintenance of employment in their respective businesses, said Dr. Aggarwal While releasing a report on Impact of Pandemic COVID-19: Recommendations on Trade, Industry and Economy to the Government undertaken by PHD Chamber of Commerce and Industry, Dr. Aggarwal said that Government should consider following measures to facilitate trade and industry in this extremely difficult time : The Government should set up a Pandemic COVID-19 Distress Fund of Rs 25,000 crore for MSMEs to provide assistance to those units which get severely affected by the impact of lock down. Release of outstanding payments from Government departments and PSUs immediately to MSMEs within 7 days should be considered and they should be asked to report the compliances to their controlling Ministers with any pending dues with reasons. Immediate interest rate cut by 100 basis points by RBI needed at this juncture to rejuvenate demand. Comparing interest rates of select economies, India’s interest rate at 5.15% is significantly higher. The interest rate in economies like USA, UK, Germany, Italy, Spain among others are currently zero or near zero. No NPA should be declared for the next 6 months till 30 September 2020. Moratorium on repayment of interest and loan installments by the banks and NBFCs for the next 6 months should be allowed to the loans. Salary for the month of March 2020 and thereafter till this problem does not subside, 80% of the same should be funded by the Government as UK Government has set up the Coronavirus Job Retention Scheme covering 80% of the salary of retained workers. This can be done for the Indian industry by way of providing credit in GST/ income tax/ advance payments/ statutory payments by the businesses. Existing working capital requirement of the businesses should be automatically increased by 25% and no new application should be required to be filed for this purpose. Interest subvention of 2% should be given to all the severely affected industries like travel & tourism, aviation, leather, textiles, hospitality, electronics and others basis the adverse impact arising due to corona issue. For MSME, we suggest interest subvention of 3%. The margin requirements fulfilled for loans against shares should be reduced to 40% wherever it is more as the share prices have come down drastically at the unrealistic level. Circuit filter in the market should be revised from the current level of 10% to 5%. Declaring capital markets as essential services on par with State of Maharashtra and issuing a clarification to include Stock Brokers and depository participants as essential Services and advise all State Governments to issue clarifications on the same. There should not be any prosecution against the businesses excluding the frauds till the impact of pandemic COVID-19 subsides. Exports are vital component of the economy and in the current situation the significance of exports becomes crucial to meet up the import requirements/ foreign exchange. Certificates/ rules of origin are required by the exporters to export their consignments to foreign markets. So, at this juncture it becomes crucial to allow rules of origin under the essential services so that exports are not impacted due to pandemic COVID-19. Exports are covered in essential category, however, industry stakeholders seeks help from the Government as they are facing difficulties in movements of goods amid lockdown in the country. Hence, it is suggested that a curfew pass from a centralised system valid across India should be provided to vehicles who are dealing in movements of essential items along with provision for an extra remark on the e-way bill itself for trucks on their return way. It is suggested that the exemption for essential commodities should cover all raw materials and food ingredients and others used by food processing industry and packaging materials and exempt them from manufacturing and movement or travel restrictions. Access to office for accounts / tally related work is crucial for releasing payments to suppliers and receipt from debtors as many industry stakeholders don’t have access to digital payment modes and will result in non-occurrence of defaults of MSMEs There is a need for extension of insurance payments to provide ease to industry and consumers. Shopping centres/ Malls to overcome the current challenging environment by waiving off of interest on bank loans, NBFC’s for the period the malls are shut. Allow a moratorium period in repayment of bank’s principle amount without levy of any penalties /penal interest and without impacting the credit rating. We look forward to the consideration of our points for the benefit of trade and industry to combat the impact of pandemic COVID-19, said Dr Aggarwal. Report on Impact of Pandemic COVID-19: Recommendations on Trade, Industry and Economy to the Government undertaken by PHD Chamber of Commerce and Industry is attached. Ends. Media Division PHD Chamber of Commerce and Industry