Confederation of Indian Industry (CII) based on its assessment of the economy and the on-ground situation has submitted its recommendations on an organised re-start post the lock down to the Government.

Detailing the suggestions Chandrajit Banerjee, director general CII, said, “The Government should extend additional support to the people at the bottom of the pyramid thorough cash transfers. Support to industry could come through the banking system.”

Explaining the rationale, he added “Our estimates are that the economy would need a credit expansion of 14-15 per cent. Additionally, support through banks would allow the government a leverage of 5-6 times, mitigating the fiscal impact”.

The support should include working capital enhancement and support for payment of wages to all industry and special re-construction terms loans for MSMEs and the stressed sectors

CII recommendations also include measures on issues related to health, safety, logistics, migrant workers and coordination between centre and states.

Additional support to the lowest strata and the informal sector through cash transfers, amounting to INR 2 lakh crore account holders.

Support to enterprises through banks enhanced credit limits for working capital across the board to all industries.

Additional working capital equivalent to April - June wage bill of the borrowers, backed by a Government guarantee, at 4-5 per cent, with a refinance guarantee from RBI.

The stress in the real sector has the possibility of spreading to the financial sector. Government of India should set apart a fund of INR 30,000 crs that could be used by banks that meet certain criteria and under specified conditions to access this fund by way of issuing Tier I bonds, which will be convertible into equity at the option of the fund.