Economy can be revived only by boosting consumer sentiments: FICCI prez

The economy can be revived only by boosting consumer sentiments, which are weak and need measures like discount vouchers from the government to spur the pending, FICCI President and Apollo Hospitals Joint Managing Director Sangita Reddy said on Wednesday.

The government needs to literally pump up the economy with some more spending at a time when around 20 million jobs have been lost and there is a fear of "uncertainty" amid the coronavirus pandemic, Reddy said.

He was speaking at a panel discussion on 'Outmanoeuvring Uncertainty' at the Global Business Summit here.

"What we need to do significantly is to ramp up demand stimulus. Factories are saying we have gone up to 60-70 per cent production, credit lines are better, little bit of export orders are coming back into play," she said.

Reddy, however, added that the consumer sentiment is weak. "Without (strong) consumer sentiment, you will not have the economy coming back."

The government needs to come out with more direct cash transfer as far as possible, especially with the festive season around the corner, she said.

She said FICCI has given recommendation to the government to say why do not you give consumption vouchers. "So, if there is a significant discount, 30-50 per cent discount, which is backed by government spending, this would be one more methodology to ramp up the demand," Reddy said.

Calling for no more sporadic lockdowns to curb the pandemic, she said the government also needs to ensure that while pushing for the normalcy, the lifting of lockdown is perfect and economy on all fronts, including aviation, come back.

At the same time, the government should also continue with the macro-economic reforms, she said.

Talking at the panel, Vedanta Group CEO Sunil Duggal said that as far as the revival of the economy is concerned, the government should not worry at this point of time about inflation.

They should pump in more money into the economy, even if they have to borrow money for this purpose as some push has to come from somewhere to "click and kick".

The whole cycle will become better when somebody will kick in, somebody will put in some stimulus, he said while putting emphasis on more spending towards infrastructure as it will create jobs as well.

The government should also be brave about the reforms like labour reforms, as "there are end-number of pain areas the industry is facing today and I think the government is mindful about this", he said.

Piyush Singh, senior MD and lead India market unit of Accenture, said although demand in the fast-moving consumer goods (FMCG) sector is more or less back on track, it may take 6-9 months for demand to fully recover.

Tata Motors Managing Director and Chief Executive Officer Guenter Butschek said the automobile industry volume in this financial year is likely to go back to the 2010-11 levels.

He added that lowering of taxes would bring down the total cost of owning a vehicle.