Covid : Centre allays fears of price rise

NEW DELHI:  Allaying fears of price hikes on account of the Coronavirus outbreak, Finance Minister Nirmala Sitharaman on Tuesday said the Centre is in the process of introducing measures to counteract the crisis. “Representatives from various sectors have expressed concerns mostly over shortage of supply. We will have another round of discussion on Wednesday at the secretary level to assess the impact of Coronavirus and announce measures to deal with the situation in consultation with the PMO,” Sitharaman said, addressing the media after a meeting with around 200 industry representatives and trade associations.
Sector-wise, the minister said, supply constraint is more pronounced in the pharmaceutical, chemical and electronics industries. While the pharma industry has sought lifting of ban on exports of certain items, the manufacturing sectors has demanded flexibility in paperwork and bank payments. 

“We need to ready our ports as the manufacturing industry could face trouble due to congestion when there is a rush of raw materials from China when the situation stabilises in a few months,” the finance minister said.V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, “Even as the impact of the Coronavirus on Indian economy has been limited so far, there is a risk that industries like pharma & electronics may be seriously impacted if the disruption in supply chains persists for long. It is important that the government take precautionary steps to look for alternative sources of supply. Measures 
including waiver of import duties may be considered since imports from alternative sources will be costlier.”On the import side, it proposed minimising risks to key sectors such as antibiotic drugs, mobile parts arising from supply chain disruptions. It also suggested leveraging opportunities to be an alternative destination of exports and keep supply chains running and leverage excess capacity to protect the domestic industry. The government may offer credit with a backstop facility of guarantee for companies which have the capability to start immediate production of items that can feed into domestic consumption, it said.

‘Coronavirus outbreak has impacted global growth’
Rating agency Moody’s said in a report that the “Coronavirus outbreak has diminished optimism about prospects of an incipient stabilisation of global growth this year. The effects on the global economy could compound if the rate of infection does not abate and the death toll continues to rise.”