Raise welfare spending, release dues to stoke economic activity: Assam Report

Economy


GUWAHATI: A report prepared by Assam’s State Innovation & Transformation Aayog along with industry associations has suggested that the government increase welfare spending to create demand and stoke economic activity.

The report, prepared in the backdrop of the Covid-19 pandemic and the lockdown that have hurt economic activities and resulted in job losses, said the government could use existing schemes like the national rural employment guarantee programme and other new innovative ideas to increase welfare spending.

It also suggested releasing of arrears under the special fiscal packages for Northeast India (North East Industrial Investment Promotion Policy and North East Industrial Development Scheme). Industrial subsidies pending under the two schemes total Rs 275 crore as on date against 936 claims.

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According to the report, prepared by the Aayog in collaboration with the Assam Chambers of Commerce, Confederation of Indian Industry, Federation of Indian Chambers of Commerce & Industry, Federation of Industry & Commerce of North Eastern Region (FINER) and the Indian Chamber of Commerce, there are more than 10 lakh people from Assam who are staying outside the state for higher studies, employment, business, etc. A large number of these people are employed in private security agencies in southern and western India. There are also many working in hotels and restaurants, packaging industries and fisheries.

Assuming that 2.5-3 lakh of these people have returned due the lockdown and about 2 lakh of them have decide to stay back, it could increase unemployment levels in the state. After the lockdown, many private companies are likely to go for massive reduction in manpower or wages, and support should be provided to people who would be affected by this, it said.

The report pointed out that as per a CII study, the loss to the state’s economy from the lockdown was Rs 1,000 crore a day. On the other hand, FINER has assessed an aggregate revenue loss of Rs 5,000 crore during the period of lockdown.

The report suggested a cash grant of Rs 1,019 crore to around 3.70 lakh enterprises in the unorganised sector as a one-time direct benefit transfer to restart operations. For all regular banking accounts, the credit limits may be increased by at least 25% to meet the extended cash cycle. It also suggested expeditious clearance of receivables and approved entitlements under industrial schemes.

To support micro, small and medium enterprises, the report suggested waiver of fixed power charges for three months starting March 2020, tapered subsidy on electricity bill in the range of 75%, 50% and 25% for the next three months, expeditious clearance of GST refunds and a wage subsidy of 50% for four months.

It advised the state to capitalise on businesses expected to shift from China. The state should plan to benefit from this opportunity by keeping ready the platform, policies and practices to promote and incentivise possible foreign investments, it said.



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