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Covid is unpredictable but responses should be to boost investment, demand: CII


Business disruptions due to localised lockdowns should be mitigated in order to sustain the nascent signs of economic recovery, the Confederation of Indian Industry (CII) said on Tuesday.

“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 Chandrajit Banerjee, director general, CII.

According to Banerjee, governments should standardise their responses based on certain thresholds that would trigger a certain action which would bring in a dimension of predictability and boost investment.

“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 said.

He also suggested that containment zones be limited to micro areas to ensure that the supply chains function seamlessly across state and district boundaries.

Acknowledging that the agricultural sector has emerged as a ‘beacon of hope’ for the economy, Banerjee noted that considerable government support through enhanced outlay under the National Rural Employment Guarantee Act and the Pradhan Mantri Garib Kalyan Rozgar Abhiyan have raised hopes of rebooting the economy through the rural sector.

Highlighting positive developments in other sectors, Banerjee said consumer facing industries, such as staple based FMCG would see a 15-20% growth this fiscal as demand for food and hygiene and sanitation products would rise.

Similarly, while the hospital sector is likely to see flat growth in FY21, the crisis has expedited digital health servicing which otherwise would have taken a few years to actualise, the CII statement said.

While the early signs of resumption in activity since the unlock phase started in June point to a V-shaped recovery, Banerjee called for the deployment of all policy levers to sustain the improvements.





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