Coronavirus | India Inc. stands by lockdown extension call; seeks stimulus package to rebuild economy

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India Inc. on April 14 said the nationwide lockdown extension was necessary to avert a humanitarian crisis, but insisted on the need for a stimulus package to rebuild the economy hit hard by the COVID-19 pandemic.

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Earlier in the day, Prime Minister Narendra Modi announced that the current lockdown will be extended till May 3, saying it is necessary to contain the spread of the novel coronavirus in the country.

He said detailed guidelines on implementation of the new lockdown will be announced on April 15, and some relaxations may be allowed after April 20 in places where there are no hotspots.

The catastrophic effect of the lockdown on the overall economy and livelihoods of lakhs of migrant workers triggered severe concerns following which a number of State Chief Mministers in their video conference with Mr. Modi on April 11 sought some sort of relaxation for a number of sectors.

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Late last month, the government announced a ₹1.7 lakh crore package aimed at providing relief to those hit hard by the lockdown as well as an insurance cover for healthcare professionals handling virus infected people.

“Estimates show that India may be losing close to ₹40,000 crore daily due to the national lockdown with an estimated loss amounting to ₹7-8 lakh crore during the past 21 days,” said FICCI president Sangita Reddy.

Further, it is also expected that close to 40 million jobs are at risk during the period April-Sept 2020. Hence, an urgent relief package is also critical, she said.

She observed that the Prime Minister’s directions on graded opening will help start some production activity to ensure that as soon as lockdown opens, there are no shortages faced.

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CII director general Chandrajit Banerjee said the COVID-19 curve trajectory as of now required a fitting containment response and Prime Minister’s decision for continuation of the lockdown is necessary to avert a larger humanitarian crisis.

“Prime Minister has also provided a guidance on exit from the lockdown after 20 April which helps industry plan better,” Mr. Banerjee said.

“The extension gives the government adequate preparation time to organise an orderly and safe restart of the economy as and when health conditions permit. Industry too can devise its strategies for commencing operations accordingly duringthis extension period,” Mr. Banerjee added.

Assocham secretary general Deepak Sood said the situation is quite challenging, but somehow, the industry is managing to stay afloat and pay salaries and other essential disbursements in the supply chain.

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“However, the situation may become unsustainable in the coming weeks, making it extremely important for the government to announce an effective and sizeable package for the economy,” he stated.

According to PHD Chamber president D.K. Aggarwal, a significant stimulus of 7% of GDP would help the economy to grow at around 5% in the current financial year 2020-21, rejuvenate the businesses and refuel the economic growth trajectory of the country.

IT industry body Nasscom said the extension announcement by the government will help India to build on the containment strategy of the last three weeks and strengthen our readiness to support the post lockdown phase.

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“We are also happy to note the relaxation of restrictions in green zones and hope the government will also announce the economic stimulus packages soon so that we can start focusing on rebuilding the economy. Saving lives and livelihood has to go hand in hand, ” it added.

Ratul Puri, Chairman Hindustan Power, said while lockdown and social distancing are the only two remedies for fighting the pandemic, there is a widespread impact on the businesses and the overall economy.

“Extension of lockdown is a well thought out and much-needed plan in wake of the threats posed by COVID-19. Prime Minister’s decision to monitor the effectiveness of implementation and then gradually offer relaxations post 20 April must be welcomed,” said Naveen Jindal, Chairman, Jindal Steel & Power Limited.

The lockdown that came into effect on March 25 was to expire on midnight of April 14.

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