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FICCI welcomes final tranche of the 'Atmanirbhar Bharat' economic package
May 17, 2020
NEW DELHI, 17 May 2020: Commenting on the fifth and the final tranche of announcement on Atmanirbhar Bharat economic package, FICCI said that the extra room given to state governments for market borrowings will help them discharge their responsibilities effectively in this difficult phase and was one of the most striking features.
The additional boost of Rs 40000 crore towards MGNREGS above Budgetary estimate will help provide work to the those who have returned to their homes and also support rural demand.
The announcement by FM on ensuring that management of companies do not have to unduly stress about the company being dragged into insolvency and liquidity proceedings for non-payment of debt owing to economic losses incurred during the lockdown is a welcome move and will help assure business continuity. Focus can now be on getting back on track. This meets industry request for a breather for a year. A Special dispensation under IBC for MSMEs will protect such companies from being liquidated due to the pandemic.
FICCI also welcomes Government's decision to amend the Companies Act, 2013 to decriminalise bona fide defaults under the Act through the Ordinance route, which would help companies to take benefit of this provision immediately. The move to decriminalise non-compliances of minor, technical or procedural nature will further the objective of Government to facilitate and promote ease of doing business in India and increase India's attractiveness as an investment destination and also provide relief to foreign investors from protracted litigation in cases of technical and procedural defaults. Similar decriminalisation provisions should be extended to other legislations that impact businesses. FICCI has been working with Government towards this objective.
Direct listing on foreign stock exchanges is again a long-standing FICCI demand. It will help companies in new business areas and start-ups raise money from evolved financial markets.
Reforms in Public Sector Enterprise policy and giving more space to private sector even in strategic sectors is a very bold measure and in long run will have very positive impact on the economy. We look forward to the list of strategic sectors as indicated by Finance Minister.
While these measures will surely help the economy in medium to long term, FICCI is hopeful that government will consider measures to support battered segments of industry including tourism, hospitality, aviation and healthcare. FICCI has requested that a minimum amount of Rs 20,000 crore be allotted for these sectors as they have seen maximum dip in demand and will also take much longer to recover from the set-back seen.
Private Healthcare sector also needs huge impetus in order to build capacity to fight the COVID-19 menace effectively. The sector is trying to make its contribution but needs support to sustain its efforts.
The government also needs to plan for more support for the migrant workers and the more vulnerable sections of society.
Finally, large corporates have also been significantly affected. FICCI has recommended a need for COVID liquidity bridge for providing guarantee to banks to give them comfort to restructure/ extend loans to companies whose balance sheets have been impaired due to COVID-19. Government needs to provide an amount of Rs 10,000 crore in first year towards this, which is a small amount of support needed but can have significant impact on companies and economy.