In this lockdown, the society (viz people & voluntary organizations) is doing 20 times more than what the govt is doing for the poor, homeless, migrant workers, etc. This is done on the contributions of the middle class, upper-middle-class, higher-income groups.
Small & big businessmen Micro, Small and Medium Enterprises (MSME) are the biggest donors for the social service work of distributing food & grocery, medicine, etc to crores of people in this lockdown!
The businessmen are also looking after their workforce by giving salary, food, etc without any work or revenue because of all this most of them are running out of funds. So when the lockdown is lifted, there will be no money to restart a business. Businesses are in huge distress. Secondly, as the lockdown is lifted, workers will go back to their place & will not return for 3-4 months.
So the revival of business requires at least the following stimulus from GOI
1. Waiver of Interest for the first six months of 2020 on all Term Loans/OD/CC etc, from Banks (including private banks):
Rationale: Fixed overheads have hit the Business Units (BU) hard especially interest cost. Waiver of Interest (not mere deferment) must be made for at least 6 months.
2. Increase the credit limits on working capital borrowings such as OD/CC etc:
Rationale: Existing limits have been exhausted by businesses in paying workers, providing food/grocery & paying overheads. The realization of receivables is inordinately delayed. A revival of economic activities requires a fresh infusion of funds.
3. GST to be collected on Receipt or payment (cash) basis Instead of accrual or when the bill is raised:
Rationale: Due to severe liquidity issues & worldwide distress, receivables collection will be extremely slow & bad debts will be very high. GST is collected on an accrual basis will further put a strain on working capital.
4. Issue of all the pending Refunds in Income tax and GST without any upper limits:
Rationale: It is the money due to the taxpayers and the government is holding on to them due to the defects in its Recordkeeping/ITES.
5. No Departmental activism for FY 2020-2021:
Rationale: This is time for govt to be a partner with the business community and help it to grow & overcome the crisis. Overreach & high handed actions will kill the goose laying golden eggs
6. Extend the benefit of the government paying the Employees and Employers contribution to EPF & ESIC to Industrial workers of all units irrespective of the number of workers per unit/factory.
From State government
1. Exemption in electricity fixed charges:
Fixed charges are a big drain on the working capital when business is shut down, So electricity supply should be charged only based on consumption.