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    Covid-19 outbreak: Nirmala Sitharaman says steps soon to ease supply woes, secretaries to meet today

    Synopsis

    Sitharaman today met industry and trade associations to assess the impact of the virus on businesses. The finance minister said that a meeting of the concerned secretaries will be held tomorrow. The finance minister assured the industry that she will speak to the PMO on steps to provide any relief.

    Coronavirus outbreak: Govt reviews impact, to soon announce measures, says FM Sitharaman
    NEW DELHI: The government will soon announce measures to help ease the manufacturing and supply squeeze caused by the Covid-19 outbreak in China after industry raised concerns about raw material shortages. However, companies said inventory levels are currently adequate and prices remain stable.

    Secretaries of key government ministries will meet Wednesday afternoon to consider the issues raised — notably by the pharmaceutical, chemicals and solar energy industries — during their interaction with finance minister Nirmala Sitharaman on Monday, and suggest measures.

    Subsequently, the finance ministry will discuss the issue with the Prime Minister’s Office (PMO) and announce some measures at the earliest, she said.

    No Worry About Price Rise Yet: FM
    “There wasn’t a worry about price rise from anybody as yet,” Sitharaman said after meeting industry representatives and chambers on Monday. “Immediately… there is no issue of raw materials. All of them do have, which is what I understand… Many of them also said shipping lines are still arriving. So, it’s not like as if from yesterday shortages have started… Products are going to be coming for the next week or so.”

    Imports and exports across sectors in India have felt the cascading impact of the Covid-19 outbreak in China, where 1,800 people have died and over 72,400 cases of infection have been reported.

    China supplies raw material, components and partially finished goods to a number of sectors in India.

    The finance minister said the meetings on Monday and Wednesday are timely, and added that the government had to be ready for raw material shortages and then congestion at ports when the impact of the virus diminishes.

    The minister said there was no shortage of medicines or medical equipment. The pharmaceutical industry had sought the lifting of bans on the export of certain items and addition of more items to the list of exports, so as to make use of production capacities in India.

    She, however, added that it was too early to say what impact the outbreak may have on the government’s ‘Make in India’ programme.

    “Pharma, chemicals, fertiliser and solar power (representatives) also said that this was the best time to start new units, since there is also the reduction in corporate income tax to help,” Sitharaman said.

    Industry associations also cited the necessity of capacity building in India, so as to reduce dependence on one source. The Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce & Industry (Ficci) even suggested that raw materials for the pharmaceutical sector be procured from other sources.

    Industry Demands
    The Monday meeting was attended by more than 200 representatives from sectors such as pharmaceuticals, textiles, electronics, information technology, solar power, automobiles, surgical equipment, paints, fertilisers, telecom, metals, mobile manufacturing, edible oils, health, tourism and shipping.

    Micro, small & medium enterprises (MSMEs) sought flexibility of payments from banks for the period that receipts get delayed due to the disruption in getting raw materials, as this was likely to impact their working capital cycles.

    Manufacturing and pharmaceutical industries flagged the issue of paperwork from China getting delayed though supplies were coming. The customs department should accept self-declarations, industry suggested. Airlifting raw materials, especially for the pharmaceutical industry, could be considered in an urgent situation.

    On the industry demand for flexibility in paperwork and bank payments, Sitharaman said a discussion would be held with the PMO on the steps required for relief.


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    ( Originally published on Feb 18, 2020 )
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    Subscribe to The Economic Times Prime and read the ET ePaper online.

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