You are here: Home » Economy & Policy » News
Business Standard

Modi govt adopts flexible approach towards coronavirus epidemic

FM Nirmala Sitharaman said the government was closely monitoring impact of the coronavirus on the economy

Coronavirus | Narendra Modi government

Dilasha Seth & Arup Roychoudhury  |  New Delhi 

PM Modi
FILE PHOTO: PM Narendra Modi

After multiple rounds of meetings with exporters, importers, industries, and other stakeholders, the has firmed up its response to the epidemic.

The Centre has decided against a broad-based approached and will tackle the issue on a case-to-case basis. Officials have also ruled out any rollback of import duty hikes announced in the Union Budget.

In the immediate term, the Central Board of Indirect Tax and Customs (CBIC) is working on easing clearances of goods which arrive without proper documentation.

Banks have been told by the Centre to provide bridge loans to companies which have already paid to their suppliers in China but haven’t got the deliveries yet. Hence, they are undergoing a working capital crunch, officials said.

For the long term, the CBIC and the shipping ministry have been told to plan for times when the supply resumes. There is a huge influx of delayed shipments coming into Indian ports.

“Our strategy will be to watch and respond quickly, as we do not know how long this crisis will last. A flexible response is more important. We are continuously monitoring this very closely,” principal economic advisor Sanjeev Sanyal told Business Standard.

Modi govt adopts flexible approach towards coronavirus epidemic

On Wednesday, finance minister Nirmala Sitharaman said the government was closely monitoring impact of the on the economy. Sanyal said the Centre was making sure that its response to specific cases was not held up by bureaucratic hurdles.These may be relating to certification or clearance at ports.

ALSO READ: Bulls quarantined by coronavirus spread, Sensex ends below 40K-mark

Sanyal also ruled out any import duty rollback. “I don’t think the duties are an issue because this is a supply chain problem,” he said.

Last week, Sitharaman met various industry bodies and stakeholders to deal with the fallout of coronavirus, which has infected about 80,000 people worldwide and killed around 2,700.

While the country has, so far, not seen a fatality, Indian industry has been under stress because of the dependence on China for raw materials.

The people who met Sitharaman included representatives from pharma, steel, metals, electronic manufacturers, tourism, telecom, marine products and other sectors. In the following days, Sitharaman will meet senior bureaucrats as well as officials from the Prime Minister’s office to chalk out India’s response.

ALSO READ: Coronavirus outbreak expected to halt domestic steel price rally

“There are certain areas where we obviously have better visibility, like active pharmaceutical ingredients (APIs) in the pharma sector. We know what we don’t produce and we know who produces them outside and in the country,” said Sanyal.

Sanyal admitted that there are certain APIs that are almost entirely produced by China, and in the short term, there was no alternative to importing from China.

“We do have a few weeks of and in some cases a few months of stock. So, it is not like it will come to a sudden stop. But obviously, if this situation gets prolonged, then we have to think of what we will do. In cases where we can produce it ourselves, of course, we will ramp up production,” Sanyal said.

Toll hits 2,771

US health officials urge Americans to prepare for spread of virus

Vistara to cancel 54 international flights next month as outbreak weakens demand

Cathay says 25,000 staff to take unpaid leave

Globally, 2,771 have diedand 81,233 people have been infected

“We need to make sure that the Customs and ports, among others, are functioning in a manner that they are prepared for a possible bunching of arrivals once the situation improves. To ensure smooth supply of auto components, we need faster certifications. Lastly, the trade missions around the world will help source various things from alternative sources,” Sanyal said.

Consignments are stuck at ports due to Chinese officials not being able to provide paperwork from their end as the nation’s bureaucracy is involved in tackling the outbreak.

These are the ones on which the Customs department has provided relaxation.

The finance ministry has classified the coronavirus outbreak as a natural calamity, and covered by the force majeure clause.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, February 27 2020. 00:23 IST