COVID-19: What India Inc Expects From The Government?

With the Government of India mulling over extending the 21 day lockdown, sharing below Corporate India’s expectations from the Government on steps that it can take to ease the burden on industry and tide over the COVID-19 crisis.

Bhavin Turakhia, Founder&CEO, Flock and CEO & Co-founder, Zeta said,“Today, India’s startup sector is experiencing tough times due to the COVID-19 pandemic, which is seen disrupting the progress and future potential of this highly promising sector. With startups working on a limited cashflow, we believe the government should support them in these testing times. One measure that the government stated it was considering was the suspension of Section 7, 9 and 10 of the IBC [Insolvency and Bankruptcy Code] for a period of six months if the lockdown extends beyond 30th April. If implemented, this will surely bring some relief to many young startups and help them sustain their business. Other measures which should be considered include the easing of compliance and filing guidelines for startups by eradicating the current penal provisions, while offering financial tools to help them overcome this eventuality. With COVID-19 cases increasing by the day, and reports coming in that the government might extend the lockdown by a couple of weeks, this is likely to further impact the economy with Indian entrepreneurs bearing the brunt of this uncertainty. We are confident that the government will take all of this into account and consider taking further steps to ensure the startup ecosystem is able to tide over this crisis.”

Kishan Jain, Director at Gold medal Electricals said,“We can see that COVID-19 has had a tremendous impact on India and globally, with multiple sectors being affected by the sudden but necessary lockdown. Today, with the rise in the number of coronavirus cases and an eventuality of extension in lockdown period, businesses may take several months to recover from this event with manufacturing units shut, supply chain being disrupted, imports getting stalled and a slowdown in exports. The government on its part could look at a host of measures to cushion the impact on small businesses considering that a large number of companies operate with a 1 – 2 month cash flow. One important measure is the provision of liquidity and a steady cash flow to SMEs and MSMEs, especially those that manufacture their products locally. With a good proportion of enterprises looking for financial assistance from the government, deferring or relieving loan repayments would also be a welcome move. Additionally, with the manufacturing industry getting adversely affected, the government would need to provide incentives that will help the sector bounce back quickly. This situation also throws open an opportunity for India to lower its dependence on imports of both essential and non-essential commodities, while promoting indigenous manufacturing.”