Assocham has also recommended a reduction in GST across the board by 50% for 3 months and 25% for the fiscal.
Associated Chambers of Commerce and Industry of India (ASSOCHAM) on April 8, in its letter to Finance Minister Nirmala Sitharaman, proposed several radical measures and a $200-300 billion stimulus package to support the economy from the expected destruction due to pandemic-led lockdown.
"The Chamber believes that in keeping up with most economies of the world to institute stimulus measures with 10 percent 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," Secretary-General, Deepak Sood, said in a release.
He further said out of the total corpus, $50-100 billion cash is needed over the next three months, to arrest the loss of jobs and compensate for the loss of income. "Such an infusion would help businesses and workers tide over the challenging situation."
Last month, the Finance Ministry announced Rs 1.7 lakh crore welfare package to support the poor and daily wage earners, while the Reserve Bank of India declared Rs 3.7 lakh crore liquidity stimulus measures, including 75bp cut in repo rate and 100bp cut in cash reserve ratio.
The Secretary-General feels the government also needs to modify the FRBM Act to consider the debt/GDP ratio as a metric.
"The government needs to set an example for other businesses with no bills being unpaid for more than 15 days. This will enormously help the credit cycle and will also bring down tender prices for everything," he said, adding with the deflation that is expected in overall demand, the government should implement the National Infrastructure Plan with no loss of time, once the lockdown is completed.
Assocham has also recommended a reduction in GST across the board by 50 percent for 3 months and 25 percent for the fiscal.
"The final GST due should be payable in 6 quarterly installments starting October 2020 with no interest. Final income tax of FY2019-2020 and advance tax FY 2020-2021 should be payable starting October 2020 in 6 quarterly installments with no interest," Sood explained.
For the real estate sector, the Chamber has recommended that Section 43CA and 23 (5) which deals with selling properties less than 10 percent of the circle rates and taxing of developers inventories for the notional rent be scrapped immediately. "Also, the 5 percent GST on under-construction real-estate to be scrapped or to be given a full input tax credit," it said.
Novel coronavirus forced the government to announce 21-day lockdown in the country from March 25-April 14. The virus hit a majority of key nations across the globe including the United States, Europe, China, Middle East.
So far the virus-infected cases crossed 14 lakh mark with more than 81,000 deaths worldwide, as per data compiled by Johns Hopkins University.