New Delhi [India], Apr 8 : Industry bodies FICCI and ASSOCHAM on Wednesday called for phased opening up of the economy and re-starting growth with a stimulus package of 200 billion to 300 billion dollars (about Rs 15 lakh crore to 22 lakh crore).
COVID-19 is a global health and economic crisis with an abrupt halt of activity across nations which has deeply slowed down consumption, said FICCI's Secretary General Dilip Chenoy.
There is a massive loss of employment in certain sectors like hospitality, aviation, tourism, media and entertainment. A sharp fall in equity markets is combined with higher default risk and possibility of increase in non-performing assets, he said in a presentation.
"All industry sectors across the board are facing the heat. Experts estimate a combined loss of 1.13 billion dollars in hotel, aviation and tourism alone due to large-scale cancellations."
The residential real estate is expected to register an annual decline of 25 to 35 per cent. "The country's retail sector has faced losses of up to 30 billion dollars over the past fortnight with non-grocery and food retailers reporting 80 to 100 per cent reduction in sales," said Chenoy.
He called for bringing down the cost of funds further through reduction in policy rates by about 100 basis points besides providing special liquidity support for any compes, banks and non-banking finance compes that may come under strain.
ASSOCHAM Secretary General Deepak Sood called for a stimulus package of at least 200 billion to 300 billion dollars to thwart what he called is one of the deepest global recession expected in the world's history.
He said 50 billion to 100 billion dollars cash needs to be infused in the system over the next three months to arrest the loss of jobs and compensate for the loss of income.
"It will be critical to ensure we proceed with three objectives -- immediate assistance to employees and labour through direct transfers and through employers, ensuring that compes have enough cashflow to survive the downturn, and finally stimulating demand and investment to revive the economy through fiscal and tax measures."
Sood also recommended a reduction in Goods and Services Tax (GST) across the board by 50 per cent for three months and 25 per cent for the fiscal.
Meanwhile, Soumya Kanti Ghosh, Group Chief Economic Adviser at State Bank of India (SBI), said the government rightfully enforced lockdown in the country till April 14 but a very long period of shutdown can lead to other problems, including social unrest.
He said the economic exit strategy must account for how erosion in demand is restored in a quick time. For this, first preference must be given to agriculture and procurement as 50 per cent of the population is dependent on agriculture and allied activity.
There should be some relaxation in inland transport like road transport and railways keeping in mind the dependency of rural population on it. Ghosh said retail trade may be allowed for extended time as it supports over 25 crore households.
( With inputs from ANI )