Sangita Reddy, President, FICCI
said, there is a need to neutralise the Covid-19 impact and supporting businesses that have the potential to bounce back. That is the only way to ensure the sustainability of businesses post -lockdown
and safeguard the economy.
Ensuring business continuity of large businesses is important to put the economy back on track, also since 50% of MSMEs are dependent on such businesses.
The concerted response from the government, RBI, and banks require minimal expense to the exchequer.
Sumit Khanna, Partner, Deloitte
India said, even sustainable businesses are starved for liquidity. Hence suggest deferment of Covid-19 related losses by businesses and Liquidity Bridge support of Rs 3-4 trillion to fill the gap created, through the banking system.
Given a sharp fall in revenues breach of lending covenants and possible defaults threaten the banks which gain by keeping resultant NPAs in check.
said the redeeming feature of the proposal is that the government does not undertake any fund outflow upfront. The government is only required to provide a guarantee on bank loans based on an assessment by lending banks, guided by parameters set by RBI.
There may be defaults despite continuous and rigorous monitoring and are expected to be contained within 10 per cent. This entails support of Rs 30,000 - 40,000 crore to banks over a period of five years by the Government, it added.