The Advisory Council to the 15th Finance Commission, which met on April 24, has expressed its concern regarding the Indian economy going into a slowdown due to the coronavirus disease (COVID-19) crisis and has said that a well-designed financial aid package will be required to deal with the situation.
The council noted that the economic impact of the COVID-19 lockdown will lead to changes in how we deal with matters of finance and if no sustainable course of action is pursued, it will cause a slowdown in domestic activity, impact on cash flows of financial institutions and business enterprises.
The Advisory Council further stated that the growth rate projected will have to be reduced and Indian enterprises will face a slowdown in demand due to global recession.
Stressing on the small business enterprise, the 15th Finance Commission advisory council said the government should look to support small enterprises and avert bankruptcies in the financial sector as part of the fiscal response to deal with the coronavirus crisis.
The council also highlighted Reserve Bank of India's role during the recession period and observed that non-banking companies have to be saved from bankruptcy and RBI should come forward to help them by giving loan guarantee.
The Finance Commission meeting was chaired by NK Singh, Chairman of the 15th Finance Commission, and was attended by all members and senior officials of the Commission. From the Advisory Council, Dr. Sajjid Z Chinoy, Dr. Prachi Mishra, Neelkanth Mishra, and Dr. Omkar Goswami joined the meeting on April 23 and Dr. Arvind Virmani, Dr. Indira Rajaraman, Dr. DK Srivastava, Dr. M Govinda Rao, Dr. Sudipto Mundle and Dr. Krishnamurthy Subramanian joined the meeting on April 24.
