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A Helping Hand That Wasn’t
The Centre’s Rs 20-lakh crore stimulus package, considered as the third-most substantial packages in the world, missed out several distressed sectors from the direct benefits
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“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” — John Quincy Adams
Over five days, Union Finance Minister Nirmala Sitharaman announced a break-up of the Rs 20 lakh crore Covid-19 stimulus package, promised by Prime Minister Narendra Modi on 12 May. The package, equivalent to10 per cent of India’s GDP, is intended to infuse new life into an economy brought to a standstill by the novel coronavirus pandemic.
The Atmanirbhar Bharat Abhiyaan, as the package has been monikered, has, however, left many sectors of the economy out in the cold. Industry segments like tourism, hospitality, retail, auto, media and entertainment and advertising are among those that have not received the financial support required to pull them out of the morass. Even at a cursory glance, an employment generating sector like tourism and hospitality, definitely seems to have been overlooked. Not only does it need government support to pay salaries, but also for the upkeep of properties. Recent news reports suggest that Thomas Cook, SOTC and FCM Travel have sacked close to 550 employees and have benched more than 15 per cent of their employees. At least 42 million jobs are at stake in the sector.
Similarly, the auto sector, which was already in dire need of help, has been practically ignored. According to the Society of Indian Automobile Manufacturers (SIAM), the package for the agriculture sector may help the auto industry indirectly, but it had hoped for more support to be able to save jobs and of course, boost demand. Similarly, the package had nothing for the Indian film industry, where losses are estimated to mount to Rs 2,500 crore, now that movie theatres are unlikely to reopen before August. Meanwhile, the Confederation of All India Traders (CAIT) estimates a loss of Rs 5.50 lakh crore in the first 40 days of the lockdown alone, beginning 24 March.
Sectors that have been included in the stimulus package have heaved a sigh of relief, but there are many others that also require a helping hand from the government. In these tough times, some of these key sectors too need to be uplifted, if India’s growth story is to fructify the way it is intended to. In this issue of BW Businessworld, we focus on the sectors that have been left out in the cold.
We also examine the impact the finance minister’s announcements will have on agriculture. We take a close look at provisions in the stimulus package for the defence sector, where the FDI limit for defence production has been enhanced to 74 per cent from 49 per cent. The long-pending demand for the corporatisation of the Ordnance Factory Board has been fulfilled and provisions have been made for a separate budget for the Indian defence industry.
Of course, we also have all our regular columns that you look forward to. I do hope you enjoy reading this issue, as much as we did compiling it.