Manufacturing, construction should be allowed at 25% capacity post-lockdown : CII

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As the 21-day lockdown nears its completion, government and industry experts are divided on whether the lockdown should persist or be lifted in a phased manner.

A CII report titled 'Exit from the Lockdown' recommends phase-wise lifting of the lockdown. In the first phase, manufacturing, e-commerce and construction may be permitted to open up partially; around 25 percent to begin with. In the second phase, all other sectors could be restarted.

The report makes three classifications of geographies as red, amber and green, based on the incidence of COVID cases. CII has recommended opening industries in concentric circles around the red zones. The radiating heat map should turn from red in the inside to green on the outside.

A more complex point is whether all industries can open in the green zones and which ones should open in the amber zone, assuming that none would be operational in the red zones other than essential and exempt services.

CII has proposed five aspects that shall be considered while opening up the economy from the current lockdown which includes workplace safety, logistics issues, re-starting industry in phases, getting back the migrant workforce and putting an institutional mechanism for effective coordination in real-time.

Any enterprise which does not comply with this on a self-certification basis should be subject to stringent penalties.

To ensure financial security for companies, the report has recommended that banks provide additional working capital to all companies, equivalent to their three-month salary or wage bill at interest rates between 4-5 percent.

CII has sought government guarantee so that it can step in and backstop the banks in case the companies fail to pay up and RBI can provide a refinance guarantee on the same too.

Further, the report recommends that in some of the stressed sectors like construction, aviation or tourism, the additional working capital should to cover their interest obligation as well.

Recommending providing essentials instead of Direct Benefit Transfers (DBT), the report suggest distressed sections of the population should be provided ration directly rather than cash.

This negates the impact of inflation, if any, on the population and also ensures that the money is indeed spent on food and basic provisions rather than other forms of expenditure.