Nascent signs of recovery visible, need to keep it up : CII

A host of macroeconomic indicators such as improved goods and services tax (GST) collections, railway freight traffic, petrol consumption, demand for power, electronic toll collections among others have mirrored the incipient signs of recovery, giving hope to Indian policymakers. Though still early, these are promising signs, pointing towards a V-shaped recovery in the immediate aftermath of the lockdown, the Confederation of Indian Industry (CII) said.

“In order to nurture the nascent signs of recovery, it is important to mitigate the uncertainties that are currently prevailing regarding the restrictions. Corporates are unable to plan beyond a horizon of a few weeks, affecting all operations”, said Mr Chandrajit Banerjee, Director General, CII.

“Although it is not possible to predict the course of the pandemic, a dashboard approach, triggering predictable responses based on the progression of infections, can reduce uncertainty and boost both consumer and industry confidence, which in turn will support demand and investment recovery”, Banerjee added. Further, in order to ensure that the supply chains function seamlessly across state and district boundaries, including the containment zones, the latter should be limited to micro areas instead of a wider area.

To boost rural demand, the government has increased allocation for the rural sector through the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Besides, an above normal monsoon is likely to come as a big sigh of relief for the policymakers at a time when several other sectors are struggling in the wake of the Coronavirus spread. The government has also announced a Rs 3 lakh crore collateral free loan for micro small and medium enterprises (MSMEs). The Rs 30,000 crore special liquidity scheme for NBFCs/HFCs/MFs has also taken off well, the industry body added.

Economic activities almost across the country had come to a near halt from March 25 and remained so through the month of April and a large part of May. Economists have predicted a sharp decline in GDP growth for the April to June quarter of the current financial year..