Industry Seeks Fiscal & Monetary Relief from Government

New Delhi, April 5 – The apex business chamber, CII, on Sunday sought further fiscal and monetary policy concessions from the government and the RBI to address the global uncertainty triggered by the West Asia conflict, even as it praised “the series of timely, well-calibrated, and coordinated measures” that have already been taken.

CII Director General Chandrajit Banerjee said, “The government and the RBI have responded with speed, clarity, and coordination. The initial measures have helped stabilize sentiment and demonstrate that India’s policy framework is both responsive and resilient in the face of external shocks.”

At the same time, CII observed that the situation continues to evolve, with underlying supply-side pressures in energy, logistics, and trade channels persisting beyond the initial phase. Industry feedback indicates that while the first round of policy measures has mitigated the immediate impact, several sectors continue to face operational and financial stress, particularly MSMEs, exporters, and energy-intensive industries.

Banerjee emphasized that “India’s experience during previous crises has shown that coordinated fiscal and monetary action can significantly strengthen resilience. The next phase of policy response may therefore need to focus on targeted liquidity support, credit facilitation, trade cost management, and foreign exchange stability.”

CII has sought the introduction of a time-bound Conflict-Linked Emergency Credit Line Guarantee Scheme (CL-ECLGS) by the Finance Ministry, similar in spirit to the Emergency Credit Line Guarantee Scheme (ECLGS) implemented during the pandemic, so that additional collateral-free working capital can be extended to affected enterprises through government-backed guarantees, particularly targeting MSMEs, exporters, and gas-dependent sectors.

It has also urged the RBI to consider a temporary and clearly defined three-month moratorium and restructuring window for MSMEs, especially exporters and ancillary units linked to export supply chains.

According to the CII statement, the RBI could institute a Special Refinance Window for MSMEs and other affected sectors, complemented by targeted liquidity support through instruments such as Targeted Long Term Repo Operations (TLTRO), thereby enabling banks and non-banking financial companies (NBFCs) to continue extending credit at reasonable cost to productive sectors.

It further stated that the Ministry of Finance, in conjunction with the RBI, could provide immediate contractual and operational relief to industry, especially MSMEs, by extending delivery timelines for Central and State PSU contracts by 3–4 months without invoking Liquidated Damages clauses, reduce Performance Bank Guarantee and Security Deposit requirements to minimal levels to ease liquidity constraints. In addition, temporary relief in electricity tariffs may also be offered to help manage rising input costs during the disruption period.

Besides, CII has suggested that banks may be enabled, for a limited period, to reassess and enhance working capital limits in deserving cases, particularly for export-oriented and gas-dependent units facing temporary stress. A calibrated increase in cash credit limits of up to 20 per cent, coupled with concessional lending terms during the disruption period, would provide meaningful operational relief.

It has sought a temporary reduction or waiver of administrative banking charges, including loan processing fees, foreign exchange handling charges, and documentation costs, may be considered for MSMEs and affected sectors.

Other items on the CII wish-list include that the Trade Receivables Discounting System (TReDS) platform may be expanded more actively across affected industrial clusters, a time-bound rationalisation of the tax and duty structure on energy inputs to mitigate cascading cost impacts of the disruption, and accelerated depreciation benefits on capital goods.