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Industry has suggested a slew of measures to mitigate the inconvenience post demonetisation, while indicating that 'there will be some impact felt' on its performance during the transition period. The recommendations from industry members of Ficci were shared today with the Prime Minister's Office, Department of Economic Affairs Secretary Shaktikanta Das and Department of Industrial Policy and Promotion Secretary Ramesh Abhishek, a release said. Among the recommendations are that the allowance given to Government hospitals and healthcare providers of accepting old high denomination notes should be extended to private healthcare providers. Mobile banking vans should also be set up by banks at private hospitals. The industry members have suggested that banking hours be extended on working days and a massive drive should be launched to educate people on use of digital means for payments across the country. "RBI should consider bringing down the interest rates that could help stabilise the demand in the economy.
An immediate 50 basis points cut in repo rate should be considered by RBI's monetary policy committee as well as some measures may be introduced to provide easy finance for sectors like housing, automobiles and consumer durables. "There should be a reduction in direct taxes and widening of income tax brackets and the upcoming budget is being keenly looked at from this perspective," the members suggested. Moreover, immediate measures to be taken so that forex dealers have enough liquidity to meet the requirements of foreign visitors and the limit of Rs 5,000 for exchange by visiting foreigners should be reviewed to reduce the inconvenience being caused to them. Other suggestions call for RBI to issue guidelines to banks to raise the overdraft limits of current accounts (currently Rs 50,000) to help businesses tide over the currency shortage. Besides, Government should consider leveraging the greater network of systematically important NBFCs in rural markets to withdraw the demonetised currency with KYC documents, for pre-existing loans of duly registered farm equipment loans. The industry members have also suggested lifting the cap on cash withdrawal for micro finance institutions and leveraging the MFI network for withdrawal of the demonetised currency and issue of fresh currency in the sector. However, the industry feels that the demonetisation is a positive measure which will have a major impact in reducing the parallel economy and moving the informal economy into the main stream. "This would result in larger revenues to the exchequer, consequently increased public spending, which would boost the economy. This would also lead to increased bank deposits, lower borrowing rates giving a boost to investments and further strengthening the economic development of our country," Ficci said. Further, risk rating of India will improve that will have a positive impact on foreign direct investment in key sectors.
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