FICCI says direct income support measures urgently needed to boost demand

After two successive waves of the widespread COVID-19 pandemic and the resultant hit to incomes and jobs, domestic demand has tumbled as households scale back spending. FICCI has argued in favour of specific income support to rural India as well as urban poor, income tax reductions for the middle class, and temporary reductions in indirect taxes.

Subhayan Chakraborty

June 01, 2021 / 15:00 IST

Migrant workers going back home due to lockdowns. [Image: Shutterstock]

Industry body FICCI has pushed for direct income support measures to boost demand in the country, which has plummeted as households curb their spending amid economic uncertainty and job losses due to COVID-19 crisis.

"We feel that there is an urgent need for boosting demand through Direct Income Support measures. Focus on urban poor, security cover for Micro, Small and Medium Enterprises and other high contact-based services will be critical,” FICCI President Uday Shankar said.

"Unlike last time, when households fell back on their savings and helped in quick economic recovery with pent-up demand, this time, savings are depleted as health expenditure has been quite high," Shankar added.

While industrial production has not been hit by supply side issues like it was affected during the first wave owing to nationwide lockdown, domestic demand has crashed during the second wave of the COVID-19 pandemic.

Ficci's latest Business Confidence Survey released on May 31 also flagged weak demand as the biggest challenge for businesses.

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