New Delhi: Industry body CII has recommended to the Centre for providing a fiscal support package, for FY21, limited to 2 per cent of the GDP and to support enterprises through banks.
Accordingly, the industry body in its recommendations – “Towards an Organised, Safe & Sustainable Re-start of the Economy” – said: “Since we are not going to see the end of the crisis soon, the government should not spend all its firepower at once. Safeguarding macro fundamentals are important to ensure that the country does not suffer significant rating downgrades, and potential flight of capital”.
“In view of this, we recommend a fiscal support package, for FY21, limited to 2 per cent of the GDP, in addition to the INR 1.7 lakh crore provided under the Pradhan Mantri Garib Kalyan Yojana.”
Besides, the industry body has urged the Central government to support enterprises through banks. “Our estimates are that the economy would need a credit expansion of 14-15 per cent,” the recommendation papaer said.
CII requested the RBI to extend the wage and interest support. Banks should provide additional working capital limits, equivalent to the April-June wage bill of the borrowers, backed by a government guarantee, at 4-5 per cent, with a refinance guarantee from RBI, the paper read.