“An economic package to boost growth and deal with serious cash flow difficulties”
A series of measures announced by the government as part of the economic package of Rs 6.29 lakh crore will boost growth and should address the severe liquidity crisis faced by businesses due to the second wave of the pandemic. Covid, industry players and exporters said Monday.
To help revive the economy hit by the coronavirus pandemic, Finance Minister Nirmala Sitharaman on Monday announced a series of measures, including a Rs 1.1 lakh crore credit guarantee program to improve health infrastructure and increase the limit under the ECGLS by 50% to Rs 4.5 lakh crore for the MSME sector facing a liquidity shortage.
Industrial chamber PHDCCI said the measures will bring large-scale economic recovery through increased demand, private investment, manufacturing competitiveness, exports, increased agricultural productivity and a strong build-up of health infrastructure in non-urban cities. metropolitan.
The measures “will put the economic growth path back on track as soon as possible,” he said.
CII said the measures should address the severe cash flow distress precipitated by trade disruptions caused by lockdowns following the second wave of the pandemic. “The additional tranche of economic stimulus measures with announced spending in crore of Rs 6.29 lakh will give a significant boost to growth this year,” he said.
Welcoming the measures, former Federation of Indian Export Organizations (FIEO) chairman SK Saraf said the measures would help revive economic growth and boost exports.
“ECGC’s insurance coverage will give the export sector a big boost and comfort the exporting community in this time of crisis,” Saraf said.
Leather Export Council (CLE) Chairman Sanjay Leekha said the announcements would help the sector’s export growth and the proposal to inject equity into the ECGC would provide much-needed risk coverage in the sector. current pandemic situation.
“The extension of the Emergency Line of Credit Guarantee Program (ECGLS) and the launch of a loan guarantee program for sectors affected by Covid will be of great help to exporters,” he said. he declares.
Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said the decisions regarding an additional provision of Rs 1.5 lakh crore for ECGLS and equity infusion into the Company of 5-year Export Credit Guarantee (ECGC) to increase export insurance coverage of goods by Rs 88,000 crore will greatly benefit MSMEs and exporters.
Assocham said the measures are aimed at providing relief to sectors hard hit by the Covid 19 pandemic and the package can be called a “life-saving dose” for a large number of sectors.
Industry body Ficci said it was the need of the moment. The direct support offered to the tourism and travel sector was much needed as it was hit hard in the first two waves of the pandemic and continues to face the heat due to the uncertainty, he said. added.
Vikash Agarwal, President of the Indian Chamber of Commerce (ICC), said this timely intervention will certainly boost sectors such as healthcare, microfinance, tourism, fertilizers, export, digital connectivity and electronics.
Aditi Nayar, chief economist, ICRA Ltd, said the announcements contained a mix of new programs focused on helping sectors affected by the pandemic and expanding previous programs.
“Putting aside the guarantee programs and announcements that had already been made before today, the increase in budgetary expenditure during fiscal year 2022 based on the new announcements is estimated at around Rs 0.6 billion, ”she said.
Programs worth 2.4 trillion rupees are spread over the next two to four years and some of them had already been announced at budget time and therefore part of their cost has already been taken into account. account, she added.
Rupinder Malik, Partner, J Sagar Associates, said extending Aatmanirbhar Bharat Rozgar Yojana until March 31, 2022 could prevent job losses in low-income, labor-intensive industries.