Govt moves to counter $30-bn fiscal disruption

Tribune News Service

New Delhi, February 18

Union Finance Minister Nirmala Sitharaman has called for a meeting of secretaries of several economic ministries tomorrow to prepare proposals to counter disruption worth nearly $30 billion in imports of inputs and raw materials due to slump in manufacturing and shipment from China.

“Some response will be announced at the earliest,” she said while stating that there is no worry as yet about price rise, especially in pharmaceutical and textile sectors that have seen a major disruption.

While Sitharaman parried questions on assessment of the impact and maintained that “no one has talked of a serious crisis”, a report by the CII said 20 sectors had extremely high import dependence on China and there would be “significant ramifications” for the Indian industry. It said shipping, pharmaceuticals, automobiles, mobiles, electronics and textiles were suffering while the supply chain disruptions were expected to affect several associated industries and markets. Overall, it assessed the impact of coronavirus on Indian industry as moderate.

Sitharaman said representatives of about 18 sectors spoke at today’s meeting about supply disruptions and associated problems. The conference to be held tomorrow was expected to take on board suggestions made today at the meeting which also included secretary-level officers from the ministries of finance, commerce and heavy industries, besides senior officials from the departments of pharmaceuticals, shipping, MSME, telecom and public enterprises.

Sitharaman said the meeting tomorrow would be preceded by interaction between secretary-level officers of the Finance Ministry and other ministries concerned to prepare proposals for discussions with the Prime Minister’s Office. These may take into account demands expressed today like duty cuts for importing raw materials from alternative sources such as the US and Vietnam, asking banks to relax requirements on export credit, etc, and asking the customs to release shipments whose papers have been held up in China.

The meeting tomorrow will not just deliberate on the slow shipments and supply chain disruptions from China but also the point highlighted by the industry today about congestion at the ports after the impact of coronavirus abates and there is a rush of shipments that were held up in China.

The businesspersons at today’s meeting who spoke about disruptions were from sectors such as pharmaceuticals, textiles, chemicals, electronics, IT hardware, solar, auto, surgical equipment, paints, fertilisers, glass, mobile manufacturing, edible oil, health, tourism, shipping and marine food products.

The industry had also expressed eagerness to use this opportunity of held-up shipments to improve manufacturing capacity in India. “The capacity for improvement exists. Because of cost competitiveness we had lost out. Can we revive this manufacturing?” Sitharaman wondered.

Join Whatsapp Channel of The Tribune for latest updates.