Time for bold decisions

Indians always stand by the nation, which is a unique characteristic demonstrated many a time. It's once again proved by people when they rose to the occasion for the Janata Curfew to fight the coronavirus, which is giving jitters to the world.

While the people have demonstrated they are with Prime Minister Narendra Modi and Chief Ministers of various State responding to the call of Janata Curfew, the government should come to the rescue of every strata of society.

The political executive at the Centre too should hear the request of the countrymen and respond with equal sensitivity and prove that they are by the people, of the people and for the people.

Covid-19 has posed a threat to the life of people as well as to the economy. Crisil, a global agency providing risk and policy advisory services, has revealed that corona is going to hit the Indian economy severely if it continues to the first quarter of the next fiscal.

This is where the political executive of the country needs to exhibit boldness in taking hard decisions to ensure that even if the economy loses something for the present, it would make up in the immediate future and bounce back making every citizen proud to be part of this era.

There is an urgent need for the Union Government to work out strategies in the next two weeks to prevent the economy from total collapse. Already the growth projection for 2020 for India has been slashed from 5.7% to 5.2% as it feared that the Asia-Pacific region would slide into recession.

To contain the virus, the state governments have closed schools, cinema theatres, cinema production, gyms, clubs, restaurants and bars among other places to minimise the social contact. Due to disruption in supply chain from China particularly in electronics; business investments and exports are likely to be hit badly.

There is mounting evidence that services and industrial sectors will face the heat in the coming months. "Social distancing measures and cut in discretionary spending are beginning to hit economic activity in all sectors.

With extension of lockdown upto March 31, all sectors would suffer major loss and revenue gets impacted as there will be no productivity. Hence the Central Government should immediately announce a relief package.

The Government may consider measures like reduction in Direct taxes for salaries class - reducing excise duty to pass on the benefit of reduced oil prices - Extending the time lines for payment of taxes for the Month / Quarter ending March 2020 - Special incentives to Companies which are directly impacted by the current situation like Hotels, Travels etc., - Extending the due dates which ends on 31st March 2020 - Extending Vivad se viswas option period (without additional payment) beyond March 2020 - Some of the measures recommended by Kerala High Court single bench order (which is stayed by Supreme Court yesterday) and relaxing NPA norms of banks and allowing MSME and most effected sectors loan instalments payment relaxation for three months...could go a long way in addressing problems like cash crunch and liquidity situation that various organisations are undergoing at this point of time.

The Government, which collects taxes when the going is good, should provide succour to tax-payers when they are in crisis. It should also postpone assessment and payment of GST or IT audits. Deferring payment of current taxes can help in increase in liquidity in the hands of companies.

Additionally, the most important facet of any measure is to ensure that once the pandemic is under control, the demand side of the economy picks up at a fast pace. This can be achieved through reduction in income-tax rates for individuals which increases their spending power.

Virtual lockdown and closure of offices across states will have impact on GST collections in March and April. Businesses across the board would be at its lowest ebb. Hence a string of measures like making more money available with the common man and reduction in GST rates for a limited period can help in speedy revival of the economy.

If the Government does not take immediate revival measures, Covid-19 may prove to be the death knell for the economy.