To mitigate the impact of Covid-19 on the state economy, Chief Minister Y S Jagan Mohan Reddy shot off a letter to Prime Minister Narendra Modi seeking a host of stimulus measures, including a year-long moratorium on GST payments, tax cuts among others.
In the 10-page letter to the Prime Minister, Jagan pointed out that 94% of the micro, small and medium enterprises (MSMEs) units have shut down in the state while 6% of the units are operating at 25-30% of full capacity. The state government is not able to sustain their busineness owing to liquidity crisis. The sector employs around 11 million people and contibutes around 7-8% to the State’s GSDP. The complete lockdown has severly impacted the MSME sector in the state, he wrote. “The impact on MSMEs is likely to have a cascading effect across the value chain even after the lockdown restrictions have been eased owing to global slowdown in demand,” Jagan pointed out. In view of this, Jagan sought waiver of electricity bill payments of commercial entities, particularly MSMEs.
Jagan wanted the Centre to defer GST, provide short-term collateral-free loans and resume export of aqua products to the US, EU and Asia quickly. Further, the Chief Minister sought a six-month moratorium on ESI, Gratutiy and PF contributions. The central government had alredy given employees and employers more time to submit their monthly insurance contribution by relaxing provisions of the Employees’ State Insurance Act in view of the Covid-19 outbreak. It had given 45 days, instead of 15 days as mandated under the Act, for submission of insurance contribution for February and March.
“Given the current pandemic, the manufacturing sector in the state is in peril and needs support in order to sustain itself and prosper in the long run. In addition to piling up of inventory due to trade and export restriction, the absence of the workforce has also hit the industry hard. While all the markets are shut down, the uncertainty around future demand looms over the sector,” the CM wrote.
Jagan also sought release of funds for projects under the National Infrastructure Pipeline and announcement of stimulus/revival packages for real estate sector. For the automobile sector, he wanted the central government to extend GST rate cuts for new vehicles.
