India's gross domestic product (GDP) could marginally expand 1.5% or even contract 0.9% in this financial year, the Confederation of Indian Industry (CII) said in a report and suggested several measures to address the economic challenges posed by the Covid-19 pandemic. The industry body sought urgent stimulus including creation of a fund to be used for subscribing to corporate bonds and credit protection scheme for micro, small and medium enterprises (MSMEs).

“Given the extent of the damage to the economy from the disruption to business, the GDP growth in FY21will likely be the lowest in many decades... government intervention becomes critical not only to sustain the economy but also to prevent any humanitarian crisis,” said Chandrajit  Banerjee, director general, CII.

The CII suggested a comprehensive economic recovery plan which includes short-term stimulus measures and medium-term structural reforms. From additional working capital limits for enterprises to more direct benefit transfers to Jan Dhan accounts, it urged the government to take further steps to provide relief to all sections of the economy.