JOIN USBandh blacks out Rs 12,500 cr in business
Industry chambers Confederation of Indian Industries (CII) and Assocham, on Thursday, estimated a loss of Rs 12,500 crore due to Bharat bandh.
“While an exact loss for the entire economy is not known, it can be estimated that almost Rs 12,500 crore has been the loss to the country in terms of disruptions in production and trade,” CII said in a release.
CII said the Centre should not yield to political pressure on reforms. “It is important to communicate the merit and necessity of reform measures. CII is hopeful that parties across the political spectrum would work to ensure that the economic reforms that are necessary for India are carried out, CII President Adi Godrej said, adding that people would benefit from the reform measures.
Assocham said, the bandh eroded the country’s Gross Domestic Product by a loss estimated at Rs 10,000 crore thereby hitting the already slowing economy. With India facing increased fears of sovereign rating downgrade, analysts said economic reforms have become crucial for the government to repair its battered economy and avert downgrades.
They also fear that in the event of a downgrade, foreign borrowing are become expensive for both the government and corporates. In addition, portfolio investments too could take a hit as many foreign institutions are prohibited from investing in countries below a certain rating threshold.
Meanwhile, as the voice against the recent diesel price hike and multi-brand retail gets shriller, rating agency Moody’s cautioned the government that any roll back on diesel will impact its subsidy reduction plan, while India Inc said the government cannot risk going back on reforms at a time of slow economic growth.
“The bandh eroded the country’s Gross Domestic Product (GDP) by loss estimated at Rs 10,000 crore thereby hitting the already slowing economy” Assocham Secretary General D S Rawat said.
Further, Rawat said India Inc is not complete without traders including small shop-keepers. Their concerns arising out of allowing FDI in multi-brand retail should be addressed. He said to say that the entire traders’ community would be wiped out because of the Walmarts of the world would be hyping up the issue.
“If the government rolls back a part of the hike, as some coalition partners and members of opposition parties have demanded, the decline in subsidies will be smaller,” Moody’s said in its credit outlook report.
Last Thursday, the government had hiked diesel prices by Rs 5 a litre and the following day, it approved FDI in sectors like retail, aviation and broadcast carriage, and part divestment in state-owned companies.
The decision led to widespread protests and also a nation-wide strike on Thursday, exactly a week after the decision.