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3 lakh cr fiscal stimulus, cash transfer to Jhan Dhan account, CII suggests measures to boost Indian economy

RBI should expand its balance sheet to accommodate the increased stimulus so that lending costs remain contained, CII President TV Narendran saidPremium
RBI should expand its balance sheet to accommodate the increased stimulus so that lending costs remain contained, CII President TV Narendran said

  • CII Presidents TV Narendran said suitable fiscal measures to alleviate the stress of people impacted by the second wave of Covid-19 are the need of the hour
  • There should be minimum 71.2 lakh average daily vaccination doses from now till December 2021 to cover the entire adult population, CII President said

The President of the Confederation of Indian Industry (CII) on Thursday said that country would require a fiscal stimulus of at least 3 lakh crore to spur economic growth amid the Covid pandemic.

The CII President TV Narendran also suggested that cash transfer to households through Jan Dhan accounts and appointment of a 'Vaccine Czar' for speedy vaccination coverage are the other two crucial things required at the moment for the Indian economy to rebound.

He said suitable fiscal measures to alleviate the stress of people impacted by the second wave of Covid-19 are the need of the hour.

The CII President said that the Indian economy is a consumption-led economy and the pandemic has impacted consumer demand. Therefore, the Indian Industry has suggested cash transfers to deal with this demand shock.

"Fiscal stimulus of 3 lakh crore is required...There is room for administering additional fiscal stimulus of up to 3 lakh crore," he said adding the RBI should expand its balance sheet to accommodate the increased stimulus so that lending costs remain contained.

Further, enhanced MNREGA allocations from the budgeted amount; short-term and focused GST cuts to boost demand; time-bound tax relief/interest subvention/stamp duty concession for home buyers; LTC cash voucher scheme like last year; and extension of the Aatmanirbhar Bharat Rozgar Yojana till March 31, 2022are other measures which Narendran suggested for the revival of the Indian economy.

Narendran also asked for ensuring timely payment to companies including MSMEs; accelerating public works programmes to ensure implementation of NIP; hiking ECLGS (Emergency Credit Line Guarantee Scheme) amount to 5 lakh crore, reduction in excise duty on fuel and inclusion of ATF (aviation turbine fuel) and other fuel products in GST (Goods and Services Tax).

On vaccination, he said there should be minimum 71.2 lakh average daily vaccination doses from now till December 2021 to cover the entire adult population.

"The Vaccine Czar (or minister) should be empowered to undertake actions like in the UK on a daily campaign to track domestic vaccine production and import supplies; equitable distribution of vaccines among states; track progress on vaccine deployment and administration; and using a dashboard approach and share progress reports daily," he said.

Further, he said the government should implement the reform agenda envisaged in the budget, including dealing with the problem of bad assets; re-capitalize public sector banks to help them brace for the impact of higher NPAs and meet credit need of industry as the economy reopens, and create a pandemic pool to cover the risk of losses due to any future pandemics.

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