Fiscal Stimulus Of Rs 3 Lakh Crore Needed To Push Demand: Industry Body CII
The Government must announce a ₹ 3 lakh crore fiscal stimulus to boost demand in the economy, industry body CII said today, adding that accelerated vaccination is the key to faster recovery.
The CII's new president TV Narendran, addressing his first press conference, said that government's fiscal stimulus should be up to 1.3 per cent of the GDP.
Advocating ramping up of vaccine production to at least 175 crore doses by 2021, Mr Narendran said that accelerated vaccination is the key to faster economic recovery, as higher taxes is not a good idea.
The industry body has estimated that 71.2 lakh average daily doses between June and December 2021 are needed to cover all adult population. It has even suggested having a separate Vaccine Minister to achieve the goal.
Optimistic about the Government achieving the target of taking the economy to the level of $5 trillion, the CII president said that it would be possible by 2025-26 with nine per cent growth in the medium term.
Some key measures suggested by the industry body to boost demand in economy are facilitating cash transfers to households through Jan Dhan accounts.
It has also suggested enhancing MGNREGA allocation from the budgetary share and short term as well as focussed GST cuts to boost demand.
The CII has also recommended time-bound tax relief and interest subvention for tax payers as well as stamp duty concessions for home buyers.
Last year's LTC cash voucher scheme should also be restarted this year, the industry body has said.
It has also suggested extending the Atmanirbhar Bharat Rozgar Yojana till March 31, 2022.
Commenting on the Reserve Bank of India (RBI) keeping the key rates unchanged, the new CII president said that the industry body was not in favour of a rate cut. In fact, he said that at least for some time, there should be no hike in the rates.
Mr Narendran, who is also the CEO and Managing Director of Tata Steel Ltd, sought greater fund infusion in state-owned banks to the tune of Rs 20,000 crore, in addition to the provisions made for this in the Union Budget.
The industry body has also recommended that a ‘national pandemic pool' should be set up by the Government in order to address the issue of rising insurance claims due to the Coronavirus pandemic.
