Fewer companies will now go bankrupt thanks to measures announced by FM: CII DG - The Daily Guardian
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Fewer companies will now go bankrupt thanks to measures announced by FM: CII DG

Gaurie Dwivedi

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CII DG Chandrajit Banerjee
CII DG Chandrajit Banerjee

Union Finance Minister Nirmala Sitharaman unveiled first in the series of economic measures as part of the Rs 20 lakh crore stimulus announced by the Prime Minister. India Inc has given a thumbs-up to the focus on MSMEs which are facing severe credit squeeze. CII DG Chandrajit Banerjee spoke to The Daily Guardian on the impact these measures would create. Edited excerpts

Q. The MSME package was in the works for some time. Are you satisfied with the scale and the scope of assistance being given to MSME?

A. The support announced to the MSMEs today was on expected line. In my assessment, the big highlight of the package is the 100% guarantee in the collateral free loans totalling Rs 3 lakh crore to the sector. The other extremely significant policy decision has been the change in the definition of what comprises MSMEs.

This has been a long-standing demand and this will be a very strong game-changer. It’s been 14 years since the MSME definition was changed which had become quite outdated. Incorporation of both investment and turnover in the definition and ending the distinction between manufacturing and services are extremely positive steps. Payment of delayed dues to MSMEs within 45 days will address issue of liquidity for the sector.

Q. How significant are the policy measures for NBFC and housing finance space? That is another area witnessing tremendous fund freeze.

A. Low credit rating is hurting liquidity and impacting lending to individuals and corporates. The measures announced today will ensure banks are able to overcome risk aversion and enable full fructification of RBI’s intervention announced so far. Government of India must step in through appropriate channels must step in to provide 20-30% of partial credit guarantee as a back-stop facility to banks to cover their risks in investments. This back-stopping facility in the form of Rs 30,000 crore of additional liquidity for struggling NBFC is an important announcement.

Q. How soon do you expect these announcements to translate into some positive economic impact?

A. Initially CII had estimated that the economic damage as a result of lockdown due to Covid would impact two quarters before it bottoms out. The measures announced t o d ay w o u l d certainly alleviate some of the economic damage. The consequence of the measures announced today will be in terms of fewer companies that will go bankrupt. With funds being made available there will be fewer “dead companies” and it also mean that the banking sector and the larger non-banking space which will be very stretched and staring at huge NPAs may be able to negotiate these headwinds better. I think both MSMEs and banks have enough ammunition to navigate through these challenging times.

Q. Would you have liked the government to provide full details of how it will fund the measures announced today?

A. In due course of time there should be more clarity in terms of funding of these measures. I am hopeful that the government will provide borrowing details soon. Today’s measures total Rs 6 lakh crore which is a significant expenditure and the fiscal math would have been worked out.

I am also hopeful that the next focus of the government would be towards implementing the factor reforms that the Prime Minister had mentioned. Land, labour and productivity measures have to be brought about. Additionally, ease-of-doing business is one area that needs to be prioritised by the government. Essentially, ease of implementation is key to the reforms that are being announced right now.

Q. You mentioned two quarters are expected to be a wash out for Indian economy. Will the measures announced today reduce that time? Do you think the turnaround will now be faster?

A. Yes, there will be some positive impact for sure. Indian economy was heading for a crash-landing and it would have seen many dead enterprises and a colossal impact on growth. A lot of that scenario has been addressed now. The measures announced today will cushion the impact of coronavirus and also ensure the turnaround may not be as late as six months. But we are expecting the government to focus on specific sectors that are worst hit — like aviation or hospitality, amongst others. The stress in some of these areas is extremely high and will need government intervention.

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CONGRESS’ PERFORMANCE IN ASSEMBLY POLLS VERY DISAPPOINTING: SONIA GANDHI

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Congress President Sonia Gandhi on Friday termed her party’s performance in the recently-concluded assembly polls as “very disappointing” and said the party “must learn appropriate lesson” from the setback in the spirit of humility and honesty. Addressing the Congress Parliamentary Party meeting, Gandhi said Congress Working Committee will meet shortly to review the results. She also termed the party’s performance as “unexpected”.

“Most unfortunately, our own performance in all the states was very disappointing and if I may say, unexpectedly so. The CWC is meeting shortly to review the results but it goes without saying that we as a party collective must draw the appropriate lessons from this setback in a spirit of humility and honesty,” she said.

Gandhi also congratulated Trinamool Congress chief and West Bengal Chief Minister Mamata Banerjee and DMK chief MK Stalin for their “handsome victories”.

Congress suffered defeats in Assam and West Bengal and could not open its account in West Bengal where it had won over 40 seats in 2016 polls. The Congress could win only two seats in Puducherry where it was in power about two months back. Only in Tamil Nadu, the party gave a credible performance as part of the DMK-led alliance which swept to power, defeating the AIADMK-led alliance.

The Congress-led Mahajot was the main challenger to the ruling BJP-led NDA in Assam and Congress-led UDF to the ruling Left Democratic Front in Kerala. While NDA returned to power in Assam, the LDF returned to power in Kerala.

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WB moves SC seeking direction to disband current vaccination policy

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The Trinamool Congress-led West Bengal government on Friday moved to the Supreme Court seeking direction to disband the current Covid-19 vaccination policy and bring in uniform vaccination policy by doing away with the differential pricing mechanism. Disband the “Liberalised and Accelerated Phase 3 Strategy of Covid-19 Vaccination” policy and adopt and implement a uniform policy of procuring 100 percent doses of Covid-19 which can be equitably distributed to the States and Union Territories for free de-centralized distribution,” the plea said.

Earlier, West Bengal Chief Minister Mamata Banerjee had written to Prime Minister Narendra Modi requesting free Covid vaccination for all citizens. “I firmly believe that this battle against Covid will be won with coordinated and collaborative efforts of all stakeholders in augmenting infrastructure and an earnest drive for universal vaccination free of cost. I am looking forward to your kind cooperation in this regard. With regards,” stated Mamata in the letter to the Prime Minister.

She had also slammed the PM for not receiving any reply from him over her letter regarding the free Covid-19 vaccination for all citizens. “I have not got any reply till now from PM Modi over the issue of free vaccination. He must be busy,” Mamata said. The third phase of the vaccination drive commenced on May 1 making everyone above the age of 18 eligible to get vaccinated against Covid-19. The Covid vaccine manufacturing companies are empowered to release up to 50 per cent of their supply to state governments and in the open market at a pre-declared price. The Covid-19 situation in India continues to deteriorate amid the second wave of coronavirus infections.

With a total of 4,14,188 new Covid-19 cases being recorded in the last 24 hours, India again reported its highest single-day spike on the second consecutive day. With this, the cumulative count of cases in the country reached 2,14,91,598, informed Union Health Ministry.

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Ministry requests states, UTs to prioritise beneficiaries of 2nd dose of vaccine

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The Union Health Ministry on Friday requested all the states and Union Territories to prioritise the beneficiaries of the second dose of the Covid-19 vaccine. “From the side of the Union Health Ministry, we requested all the states/ UTs to prioritise the beneficiaries of the second dose and ensure the timely completion of the recommended vaccination schedule,” Additional Secretary (Health) Arti Ahuja said during a media briefing.

The Ministry also urged that the states / UTs to use the vaccines received by them through the ‘Government of India channel’ in 70:30 ratio for the second dose and the first dose respectively. “Secondly, utilise the supplies of the vaccines through the Government of India channel in the 70:30 ratio for the second dose and the first dose respectively and do a regular review of the coverage of the vaccination drive,” said Ahuja.

The Ministry also said that so far, a total of 16.50 crore doses of the Covid-19 vaccine have been administered across all categories.

“Among the Healthcare workers, so far, 0.95 crore doses have been administered for the first dose and 0.64 crore doses have been given as the second dose. Similarly, for the frontline workers, 1.38 crore doses for the first dose and 0.75 crore doses for the second dose have been given,” the Additional Secretary (Health) said.

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Virat and Anushka start a Covid fundraiser, donate Rs 2 crore

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As India battles with the Covid-19 pandemic, several Bollywood celebrities and cricketers have come forward and shown their support by raising funds or providing oxygen concentrators and food essentials.

After Sachin Tendulkar, Pat Cummins, the Indian Cricket Team Skipper Virat Kohli and his actress wife Anushka Sharma are raising funds for providing help during the Covid pandemic.

Virat and Anushka have started a fundraiser for Covid-19 relief work in India and have requested their fans to donate to the fund. The couple has donated Rs 2 crore.

Virat and Anushka took to their respective social media handles and posted about the fundraiser for the people of India. Anushka said, “India is going through an extremely difficult time and the second wave of the deadly Covid-19 pandemic has pushed our country to a state of crisis. It is time for all of us to come together and do our bit for our fellow countrymen who are in serious need of support. Virat and I have been hugely pained looking at the inexplicable suffering that people are going through and we hope that this fund will aid in our fight against the virus that we are all helplessly witnessing. We are praying for everyone’s safety. We hope that you join us in our prayers to save as many lives as possible because we are all in this together. #InThisTogether”

Virat said, “We are going through an unprecedented time in the history of our country and our nation needs all of us to unite and save as many people as possible. Anushka and I have been shocked to see human suffering since last year. We have been working towards helping as many people as possible all through the pandemic and now, India wants our support more than ever. We are starting this fundraiser with the confidence that we will be able to raise substantial funds to aid those in dire need. We are confident that people will come forward to support fellow countrymen in crisis. We are in this together and we shall overcome this. #InThisTogether” The couple has collaborated with Ketto for raising funds.

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WHO APPROVES CHINESE VACCINE FOR EMERGENCY USE

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GENEVA: The World Health Organization approved the emergency use of the Chinese Covid-19 vaccine, Sinopharm, on Friday. It’s the first Chinese vaccine to receive WHO’s approval, although it is already being used in several poor countries. There is not much data about how effective Sinopharm is, however, WHO chief Tedros Adhanom Ghebreyesus told a news conference that the Chinese vaccine had received WHO’s validation of “safety, efficacy and quality”.

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SC REFUSES TO INTERFERE IN CENTRAL VISTA PROJECT

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New Delhi: The Supreme Court on Friday urged the Delhi High Court to consider the PIL filed seeking a stay on the construction work of the Central Vista project in the national capital and asked the High Court to issue orders related to the matter. An apex court bench comprising Justice Vineet Saran and Justice Dinesh Maheshwari on Friday heard the petition for the Special Leave Petition filed by the petitioner. The SC heard the plea and has requested the Delhi HC to consider it and pass orders stating that the matter involves extreme urgency.

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