COVID-19: AP CM urges Centre to extend stimulus

COVID-19: Andhra Pradesh CM urges Centre to extend stimulus measures

PTI/File photo

Andhra Pradesh Chief Minister Y S Jagan Mohan Reddy on Thursday requested the Centre to extend stimulus measures for various sectors, particularly manufacturing, to overcome the economic distress caused by the coronavirus pandemic and consequent lockdown.

In a 10-page letter to Prime Minister Narendra Modi, Reddy highlighted the contribution of different sectors to the state and the national economy and sought specific incentives to each of the sub-sectors, mainly the micro, small and medium enterprises. "Given the current pandemic, the manufacturing sector in the state is in great peril and needs support in order to sustain itself and prosper in the long run. In addition to piling up of inventory due to trade and export restriction, the absence of the workforce has also hit the industry very hard. While all the markets are shut down, the uncertainty around future demand looms over the sector," the CM pointed out.

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Exports from AP crossed Rs 98,983 crore in the 2018-19 financial year, with major items being pharmaceuticals, textiles, processed food, aqua products and electronic items, apart from engineering goods. "Due to the current lockdown the world over, many of the industries in Andhra Pradesh are not able to export. I would like to reiterate that the impact on MSMEs is likely to have a cascading effect across the value chain even after the lockdown restrictions have been eased owing to global slowdown in demand," Reddy noted. He sought creation of a 'fund of funds' for supporting MSMEs in terms of additional liquidity to meet their wage liabilities during the shutdown.

He also wanted extension of interest-free working capital term loans to the exporters to cover the cost of wages, rent, and utilities. Additional duty drawback of at least two per cent on all exports made during the period of April 1 to September 30, 2020, should be extended. Referring to the agriculture and allied sectors, the Chief Minister said more than 20 per cent of state GDP came from it as it had over 3,000 food processing units, commodity-based cluster projects, mega food parks, Multiple Agriculture Export Zones and cold chain-related infrastructure.

He wanted the Centre to defer GST, electricity charges and duties, provide short-term collateral-free loans and resume export of aqua products to US, EU and Asia quickly. He also requested the Centre to create warehousing and cold storage infrastructure at ports with special quality testing infrastructure and target new markets for exports that could fetch higher prices for our produce.

Reddy sought immediate release of funds for projects under the National Infrastructure Pipeline (Rs 102 trillion) and announcement of stimulus/revival packages for strategic sectors like real-estate. For the automobile sector, he wanted the central government to extend GST rate cuts for new vehicles.

"The automotive sector has already been facing weak demand for the past one year. The shutdown due to the pandemic has exacerbated its problem and will significantly impact the sector," the Chief Minister pointed out. He wanted the Centre to extend BS-VI deadline by six months and also defer GST payments for the sector to boost liquidity.