India's Fiscal
Response to Covid-19 Inadequate Compared to other Countries, says Industry Body
In comparison
to other countries, the fiscal package announced by India are only a few crumbs,
according to The All India Association of Industries.
"Till
date, the Indian government has not announced any stimulus packages for companies
or businesses. Many economists are of the view that the government is concerned
with increased fiscal deficit and productive output. However, it should be noted
that fiscal discipline works hand in hand with the economic upturn," the association
said in a statement.
"If
there is no conducive business environment which was already down due to massive
impact of the Global Slowdown, the laxity in announcing measures to revive this
business environment will pay no support to the already expressed fiscal challenge.
Boosting domestic consumerism will happen only by price competitiveness which is
an all-time low in the country," said Vijay Kalantri,
President, All India Association of Industries
Some
of the noted financial packages by countries on par with the Indian economy are:
Uzbekistan
also took proactive steps to minimize Covid-19 impact to the economy by
creating $1bln special fund, $3bln loans to the private sector, $500 mln loan deferrals, as well as tax holidays, and rate decreases
social payments healthcare worker bonuses and other financial support equaling close
to10% of GDP
The Indonesian
government initially announced 10.3 trillion rupiah ($727 million) rescue package
to support consumer spending and tourism in the country. The announcement was then
followed up by a second stimulus package of 120 trillion rupiah ($ 8.1 billion)
to further support its economy amid the Covid-19 outbreak. An amount of 22.9 trillion
rupiah has been allocated from the package to aid loan disbursement towards businesses
affected by the pandemic. In addition to this, the government has given 30 per cent
corporate tax discount for the next six months. Apart from that, workers in the
manufacturing sector with income below 200 million rupiah would be exempted from
paying income taxes for the upcoming six months. Finally, the Indonesian government
will also allocate some funds from the rescue package on social welfare and rural
development as well as on measures to boost household expenditure.
The Thai
cabinet has approved $17.6 billion to help alleviate the impact of coronavirus epidemic.
The package includes 150 billion baht of soft loans at 2 per cent interest rates.
The government has also announced that it will set up a 20 billion baht fund to
help firms or workers affected by the coronavirus outbreak. The government has urged
central bank to protect debtors and has decided to offer relaxed debt repayments
and lower interest rates for businesses suffering due to the coronavirus outbreak.
Moreover, the government has decided to exempt import duties on materials used for
making face masks.
The Malaysian
cabinet has approved 20 billion Malaysian ringgit ($6.6 billion) financial stimulus
to tackle the impact of coronavirus. It was also announced that travel agencies,
hotels, airlines, shopping malls would get a 15 per cent discount on monthly electricity
bills for six months beginning from April. Hotels will be exempted from service
taxes till August. Public transport drivers and tourist guides affected by coronavirus
will be given 600 Malaysian ringgit each. Doctors, medical staff, who are involved
in containment of coronavirus in Malaysia, will be given a special monthly critical
allowance of 400 Malaysian ringgit from February until the end of the outbreak.
Immigration and frontline workers will receive an allowance of 200 Malaysian ringgit
for their services.
Turkey
has announced $15.5 billion stimulus package, to protect small businesses, workers,
exporters and pensioners from the impact of coronavirus.
Under this rescue package, Turkish government will provide three-month deferral
of loan payment by firms. It will also provide financial support to the companies
affected due to the virus outbreak. Social security premiums will be postponed by
six months for retail, steel industries, shopping malls; entertainment and hospitality
sectors, food and beverage businesses, textiles as well as event organisation sectors. Furthermore, Turkish government will increase
the lowest pension payment to $231 (1500 Turkish Lira). An additional fund of $308
million (2 billion Turkish Lira) is allocated for the households in need.
Italy,
which recorded over 2,500 hundred deaths due to the coronavirus pandemic, has announced
a rescue package of up to 25 billion euros ($28 billion) on March 16. The 25-billion-euro
package includes- 10 billion euros allocated to support employment, 3.5 billion
euros to strengthen healthcare system and individual cash bonuses to the Italians
still working during country-wide lockdown. The package also include loan guarantees
to small and medium businesses hit by the crisis. The Italian government has also
laid out measures to provide citizens financial relief. Italian families can now
apply for permission to suspend their mortgage payments if business shutdowns due
to coronavirus threaten their livelihoods. Additionally, a monthly subsidy of 600
euros have been announced for 5 million workers, including those self -employed
or seasonal workers. And, parents have been entitled to claim up to 600 euros from
the government in order to pay babysitters amid the Covid-19 pandemic.
Bangladesh
announced stimulus packages to the tune of Taka 72,750 crore (USD 8,573 million)
to counter the adverse effects of coronavirus on the country’s economy. “Earlier
a Taka 5,000 crore (emergency) incentive package was declared for paying salaries
and allowances of export-oriented industry workers and employees. Further fresh
financial stimulus packages of Tk 67,750 crore were infused
in the system .The total amount of financial assistance would stand at Tk 72,750 crore, which is nearly 2.52 per cent of GDP. Bangladesh
government is going to pay salaries of all workers and staff for April may and June from this stimulus package which will be going
directly go into worker’s bank account. Total
Amt disbursed will be debited to the employer in the form
of a loan interest at 2% payable over 2 years with a 6 months moratorium!!
Kazakhstan
has reported no coronavirus cases on its soil but moved pre-emptively this week
to suspend all public events and close entertainment venues in addition to announcing
a stimulus package. An allocation 300 billion tenge ($740
million) towards measures to boost employment through infrastructure maintenance
projects, has been announced. Also, the cabinet has been instructed to provide fiscal
support to companies, enabling them to offer paid leave to employees forced to stay
home with children as the oil-exporting Central Asian nation shuts down schools
for three weeks. Inspite of neighbouring
China, an important market for Kazakh exports, has slashed gas purchases from the
former Soviet republic by up to a quarter, and a plunge in global oil prices has
sent Kazakhstan’s tenge currency to all-time lows.
The Peoples
Bank of China (PBoC) has implemented several policies
to provide economic relief during the coronavirus outbreak. On February 3, the bank
expanded reverse repo operations by $174 billion. It added another $71 billion on
February 4. On March 5, the Chinese authorities allocated 110.48 billion Yuan ($15.93
billion) for coronavirus-related funding. On March 13, China's central bank lauched $79 billion stimulus effort to help the country's ailing
economy. The People's Bank of China cut reserve requirements for banks that will
free up to $78.8 billion in funds that will aid the firms affected by the Covid-19
outbreak.