USIBC urges govt to create COVID-19 budget to combat eco impact of pandemic

A top American advocacy group has suggested the Indian government to create a separate COVID-19 budget to support incremental financing needs to address the pandemic and its economic impact.

To fund these extraordinary expenditures and financing, the government, among other measures, should consider raising funds from the domestic market through special tax-free COVID-19 bonds, US-India Business Council said.

The recommendations are part of a detailed submission on fiscal, monetary and regulatory measures to Atanu Chakraborty, Secretary, Department of Economic Affairs and head of the Empowered Group on Economic and Welfare measures.

The USIBC has also suggested financial and credit support to MSMEs; targeted financing for certain healthcare sector entities; short-term reforms to enhance farmer incomes; direct support for the aviation industry; interest and debt payment relief; customs duty and clearances reforms; to sustain Indian industry, enable firms to pay wages and save jobs, and help India's economy return to a powerful growth path.

Observing that the aviation industry is facing significant revenue challenges as they remain grounded during the pandemic, USIBC called for measures to inject liquidity and provide support, including government guarantee to banks to facilitate low interest/zero interest loans and provide liquidity to airlines to run their operations once lockdown period is over.

It also suggested reduction in parking, landing charges and airport fees for a period of 6-9 months as social distancing norms and precautions will increase cost of operations for airlines and provision of additional airspace where possible.

USIBC also pitched for support to all employees in the aviation sector similar to wage support being provided to employees in MSME so that wage bills can be optimized and layoffs minimized.