TV Narendran, Tata Steel’s MD and CEO, has taken over as President of the industry chamber CII just after the deadly second wave of Covid-19. In an interview to ET Now’s Nayantara Rai, Narendran shares CII’s prescription to reboot the economy.

CII has suggested the Narendra Modi government announce a Rs 3 lakh crore economic stimulus package, which would take the fiscal deficit to 8% from the current forecast of 6.8%. “The revenues are stronger than expected, and there is also the surplus from the RBI. The government needs to help MSMEs, and those in high contact businesses like hospitality, aviation and retail,” said Narendran.

According to CII, the Rs 3 lakh crore stimulus package should be used for:
*Cash transfers to households through Jan Dhan accounts
*Enhance MNREGA allocation from the budgeted amount
*Short-term and focused GST cuts to boost demand
*Time bound tax relief/interest subvention/stamp duty concession for home
buyers
*A LTC Cash Voucher Scheme like last year.
*Extend the Atmanirbhar Bharat Rozgar Yojana till 31 March 2022

The CII President did say that the economic impact from the second wave is not as bad as from the first wave of Covid-19, and improved global macros can also aid in a faster recovery this year. But he did concede that rising inflation can make all the difference. “Inflation is limiting the RBI’s tools, and its exhausted all the monetary policy options. This is why a fiscal stimulus package from the government is needed.”

When asked when industry will do its bit to increase investments, Narendran said, “Industry is waiting for demand to come back to increase investments, Private sector investments will depend on demand, capacity utilisation & margin expansion. Where demand is growing, so are investments. For example, the steel sector seeing need to hike investments and has announced plans of Rs 50,000-60,000 cr for next 2-3 yrs.”

In the interview, Narendran said industry can help demand back by piggybacking on the government’s expenditure plans to pumprime the economy, and by preserving jobs as that would save consumerism. He added that private sectors helping in vaccinations can act as an economic multiplier.
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