PHD Chamber expects Rs 11 lakh crore stimulus package to weather impact of COVID-19

The PHD Chamber of Commerce and Industry on Wednesday suggested a stimulus package of Rs 11 lakh crore from the government to mitigate the impact of pandemic COVID-19 on economy, trade and industry."We expect a significant fiscal stimulus of at least 5 per cent of GDP or Rs 11 lakh crore," said its President D K Aggarwal. "The government has already provided a stimulus of Rs 2 lakh crore. Therefore, our expectation is for the remaining Rs 9 lakh crore in terms of various relief measures and benefits to India's trade and industry," he said in a statement. This will help the economy to grow at about 5 per cent in the current financial year 2020-21, said Aggarwal. "We recommend increasing the consumption expenditure and compromise with the fiscal deficit even if it slips by 2 to 3 percentage points in the current financial year 2020-21," said Aggarwal."Businesses are facing hardship as inventories are piled up and working capital has been blocked. At this juncture, an automatic increase of 25 per cent in working capital without any procedure and application will reduce the stress," he said.

The increased working capital should be allowed to convert into a term-loan with a provision of three years repayment period," said Aggarwal.

He also suggested rationalisation of Goods and Services Tax (GST) rate structure by merging the 18 per cent tax slab with 12 per tax slab and further recapitalisation of public sector banks.