ASSOCHAM, Associated Chambers of Commerce of India, stated that in order to thwart the novel coronavirus and its impact, India is in desperate need of a stimulus package.
Even before the pandemic arrived, India's growth engine was actually sputtering. India recorded the lowest level in six years when the growth slowed to 4.7 per cent in 2019. India otherwise was one of the fastest-growing economies in the world.
In this crisis time, ASSOCHAM stated that India needs a minimum stimulus of USD 200 billion to support the Indian economy.
Phased over the next three months, a corpus of $50-100 billion cash is needed to be infused in order to hold the prevalent unemployment and compensate for the loss of income.
Unemployment was at a 45-year high last year. Experts giving out grim news added that the coronavirus outbreak is likely to further cripple the already frail economy.
The government might want to consider a reduction in GST across the board by 50 per cent for at least three months and 25 per cent for the fiscal.
ASSOCHAM President Dr Niranjan Hiranandani has proposed several measures to support the country's economy through its fight with the Covid-19 pandemic.
- Stimulus measures with 10 per cent of the Gross Domestic Product (GDP) needs to be instituted and India would require a transfusion of over USD 200 billion. And in about 12 to 18 months, this amount needs an ability to go up to USD 300 billion.
- Over the next three months, USD 50-100 billion cash needs to be infused in the system out of the corpus as unemployment has to be stopped and loss of income needs to be compensated.
Economist Arun Kumar was quoted as saying that India's agriculture industry contributes nearly $265bn to GDP. And the Govt's bailout of 2,000 rupees ($30) in April as an advance payment from an $80 annual pay-out for farmers will fall short as exports have stopped.
The automobile industry has also been forced to bear huge losses as experts are estimating losses of nearly $2bn. This industry contributes significantly to India's economy.
So, while most welcome the government's measures, they feel much more needs to be done to minimise the economic impact.