Business

FICCI says govt should increase fiscal deficit by 200 bps to weather COVID impact

Updated : March 23, 2020 08:00 PM IST

FICCI said increasing fiscal deficit by 200 basis points can release Rs 4 lakh crore into the system.

The industry body has also recommended that no accounts should be considered non-performing assets (NPAs) beginning March 16.

Any compliance slippage during this period should not attract prosecution, it said.

Industry body FICCI on Monday said the government should not worry about fiscal deficit to release more funds as coronavirus has brought the country to a standstill.

FICCI said increasing fiscal deficit by 200 basis points can release Rs 4 lakh crore into the system.

The industry body has also recommended that no accounts should be considered non-performing assets (NPAs) beginning March 16 and deferment of loan payments by two quarters.

“Interest payments and EMIs should be deferred by two quarters. No IBC cases should be admitted to NCLT for companies affected by COVID-19. Apart from bank loans, liquidity should be maintained for commercial papers and corporate bonds,” the statement said.

Any compliance slippage during this period should not attract prosecution, it said.

Though the government has exempted essential goods and services from lockdown, there are several process industries where shutdown takes weeks or months and restarting would take much longer time. Shutting down these industries will have a serious implication, therefore, these industries should be exempted from lockdown, it said.

“We have already started conversion of garment factories into manufacturing of masks, other manufacturing factories into manufacturing of ventilators, ect.”

FICCI said it has full support to the government’s effort to fight against the deadly virus.

FICCI says govt should increase fiscal deficit by 200 bps to weather COVID impact

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