Industry body CII has asked its member companies not to lay off their employees, its president Vikram Kirloskar said on March 19 amid the coronavirus outbreak causing economic slowdown globally.
His remarks come against the backdrop of mounting concerns that companies, including in India, could resort to retrenchment due to sluggish demand and various restrictions in place to curb spreading of the coronavirus infection.
Observing that "times are challenging", Kirloskar said the industry has sought a moratorium on all loan repayments and urged the Reserve Bank to cut interest rates and increase liquidity in the system.
"We are requesting our members to hold on to their staff and not do layoffs as far as possible and take care of small service providers as far as possible," Kirloskar told PTI in an interview.
The Confederation of Indian Industry (CII) had 9,325 companies as members at the end of 2019. Among other sectors, the airline industry is one of the worst hit by the outbreak. GoAir has asked many employees to go on leave without pay on a rotational basis and has also terminated services of expat pilots. Country's largest carrier IndiGo has announced pay cuts and debt-laden Air India too is considering a similar step.
"If I compare with the rest of the world, I think our government has done a wonderful job," he said, and suggested that the government should do more to support the economy as India's supply chains have been hit, impacting exports.
The coronavirus outbreak has impacted the whole world, and S&P Global Ratings on March 19 said that the global economy has entered into a recession, while lowering the growth forecast for major countries, including India.
Elaborating on what the industry wants from the government, Kirloskar said: "We have requested for support such as moratorium on loan repayments".
Besides, both central as well as state governments should clear pending dues to micro, small and medium enterprises as fast as possible.
He also said the Reserve Bank needs to have a "re-look" at the short-term lending rate, and relax the cash reserve ratio (CRR) requirements for banks so as to increase liquidity into the system.
Earlier this week, RBI hinted at a rate cut but stopped short of a decision, belying market expectations at a hurriedly called presser, even as it announced some liquidity enhancing measures to contain the economic fallout of coronavirus.
The central bank has started selling US dollars to banks through swap auctions to augment liquidity in the forex market amid the Indian rupee sliding significantly in comparison to the greenback.
Kirloskar further said to deal with the contagious virus, industry has started talking about virtual board meetings so that business could go on without taking any health risk.
Source: moneycontrol.com