The Union government’s immediate priority is to ramp up the country’s health infrastructure and maintain the growth momentum of the economy, finance minister Nirmala Sitharaman has conveyed to industry leaders, four people aware of the development said.
The finance minister on Monday noted suggestions of major industry associations and over a dozen business leaders to keep the economy up and running amid the second national wave of the pandemic and assured them that there would be no nationwide lockdown, the people said, requesting anonymity.
“Spoke on telephone with each of the following business/Chamber leaders. Took their inputs on industry/Association related matters. Informed them that GoI at various levels from @PMOIndia is responding to #Covid management. Working together with states for lives and livelihoods,” Sitharaman tweeted on Monday.
The government is cautious that the second wave should not disrupt the recent economic recovery, one of the people mentioned above said. A 68-day nationwide lockdown from 25 March last year led to a 24.4% contraction of the economy in the first quarter of 2020-21. The economy shrank by 7.3% in the second quarter, before expanding by 0.4% in the three months ended 31 December. Overall, the economy is expected to contract by 8% in 2020-21. But, according to a Reserve Bank of India (RBI) projection on 7 April, the economy is expected to grow at 10.5% in 2021-22 with a quarterly path of 26.2% in Q1, 8.3% in Q2, 5.4% in Q3, and 6.2% in Q4.
“The FM said that the government will give all support to healthcare and pharmaceutical sectors so that they meet the domestic requirement of medical facilities, vaccines, oxygen, ventilators, medical equipment, and important medicines. Industry has suggested several policy measures, which will be considered by the top level of the government,” the first person said.
The government is considering several policy measures to beef up healthcare infrastructure, reduce the compliance burden in the wake of the second wave of the pandemic, and provide fiscal incentives to support industry, particularly micro, small and medium enterprises (MSMEs) in this difficult time, a second person, an official in an economic ministry, said.
“Measures would be announced in different tranches, depending on the priority as this is an emerging situation that will see policy response accordingly,” the official added. HT reported on 15 April that the government was considering an economic stimulus as India sees record surge in covid-19 cases. The next day, the government enlarged the scope of the ₹3 trillion Emergency Credit Line Guarantee Scheme (ECLGS), giving more time to borrowers from small and medium companies to repay principal or interest.
Sanjay Aggarwal, president at PHD Chamber of Commerce and Industry, said that the finance minister assured the industry that the government was taking all necessary steps to ensure adequate availability of hospital beds, medicines and oxygen across the nation.