$200-300 billion stimulus needed: Assocham

New Delhi: Industry body Assocham has urged the Centre for a stimulus package of at least $200-$300 billion over the next 12-18 months to support the Indian economy.

In a 16-point agenda, the industry body recommended that the Centre institute a stimulus package of at least $200-$300 billion to "thwart one of the deepest global recession expected in the world's history".

According to Assocham Secretary-General, Deepak Sood, the chamber believes that in keeping up with most economies of the world to institute stimulus measures with 10 per cent of the Gross Domestic Product (GDP), the Indian economy would need a transfusion of over $200 billion with an ability to go up to $300 billion over the next 12-18 months.

He stated that out of the corpus, $50-100 billion cash needs to be infused in the system over the next three months, to arrest the loss of jobs and compensate for loss of income.

"It will be critical to ensure we proceed with three objectives i.e. immediate assistance to employees and labour through direct transfers and through employers, ensuring that companies have enough cash flow to survive the down turn, and finally stimulating demand and investment to revive the economy through fiscal and tax measures," the industry body said in a statement. Besides, the industry body requested the government to modify the FRBM Act to consider the debt to GDP ratio as a metric and not fiscal deficit.

Meanwhile, another industry body PHD Chamber has asked the Centre to provide Rs 11 lakh crore stimulus package to mitigate the impact of the Covid-19 pandemic.

PHD Chamber of Commerce and Industry President DK Aggarwal has recommended the Centre to institute a fiscal stimulus of at least 5 per cent of the country's GDP which comes around Rs 11 lakh crore. "The government has already provided a stimulus of Rs 2 lakh crore, therefore, our expectation is for the remaining Rs 9 lakh crore in terms of various relief measures and benefits to India's trade and industry," Aggarwal said, as per a statement.

"A significant stimulus in the tune of 5 per cent of GDP would help the economy to grow at around 5 per cent in the current financial year 2020-21."