Finance minister Nirmala Sitharaman.(Mint file photo)
Finance minister Nirmala Sitharaman.(Mint file photo)

No nationwide lockdown: Sitharaman to India Inc

The finance minister on Monday noted suggestions of major industry associations and over a dozen business leaders to keep the economy up and running amid the second wave of Covid-19 pandemic.
By Rajeev Jayaswal, Hindustan Times, New Delhi
UPDATED ON APR 20, 2021 04:59 AM IST

The Union government’s immediate priority is to ramp up the country’s health infrastructure and maintain the growth momentum of the economy, finance minister Nirmala Sitharaman has conveyed to industry leaders, four people aware of the development said.

The finance minister on Monday noted suggestions of major industry associations and over a dozen business leaders to keep the economy up and running amid the second wave of Covid-19 pandemic, and assured them that there would be no nationwide lockdown, the people said requesting anonymity.

“Spoke on telephone with each of the following business/Chamber leaders. Took their inputs on industry/Association related matters. Informed them that GoI at various levels from @PMOIndia is responding to #Covid management. Working together with states for lives and livelihoods,” Sitharaman tweeted on Monday.

Also read: Stocks fall as more states impose Covid restrictions

The government is cautious that the second wave should not disrupt the recent economic recovery, one of the people mentioned above said. A 68-day nationwide lockdown from March 25 last year led to a 24.4% contraction of the economy in the first quarter of 2020-21. The economy shrank by 7.3% in the second quarter, before entering growth territory and expanding by 0.4% in the three months ended December 31.

Overall, the economy is expected to contract by 8% in 2020-21. But, according to a Reserve Bank of India (RBI) projection on April 7, the economy is expected to grow at 10.5% in 2021-22 with a quarterly path of 26.2% in Q1, 8.3% in Q2, 5.4% in Q3, and 6.2% in Q4.

“The FM said the government will give all support to health care and pharmaceutical sectors so that they meet the domestic requirement of medical facilities, vaccines, oxygen, ventilators, medical equipment, and important medicines. Industry has suggested several policy measures, which will be considered by the top level of the government,” the first person said.

The government is considering several policy measures to beef up health care infrastructure, reduce the compliance burden in the wake of the second wave of the pandemic, and provide fiscal incentives to support industry, particularly micro, small and medium enterprises (MSMEs) in this difficult time, a second person, an official in an economic ministry, said.

“Measures would be announced in different tranches, depending on the priority as this is an emerging situation that will see policy response accordingly,” the official added.

Hindustan Times wrote on April 15 that the government was considering an economic stimulus as India sees record surge in Covid-19 cases. The next day, the government enlarged the scope of the 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS), giving more time to borrowers from small and medium companies to replay principal or interest.

Sanjay Aggarwal, president at PHD Chamber of Commerce and Industry (PHDCCI) said that the finance minister assured the industry that the government was taking all necessary steps to ensure adequate availability of hospital beds, medicines and oxygen across the nation.

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