Dipen Agrawal, President, Chamber of Associations of Maharashtra Industry and Trade (CAMIT), recently met state Revenue Minister Balasaheb Thorat and Anil Parab, Minister for Transport and Parliamentary Affairs, and submitted specific suggestions to revive state economy.
During his meeting with the ministers, Agrawal welcomed the state‘s decision to introduce ‘Unlock 1’ announced to open up the economic activities in the state. Speaking about the meeting, Agrawal said that remaining business establishments including malls, theatres and restaurants will hopefully be permitted to resume operations soon.
Here are some suggestions Agrawal gave on behalf of CAMIT during his meeting with the ministers:
Tourism Sector: The sector that is most affected by COVID-19 crisis is the Tourism sector. The World Travel and Tourism Council (WTTC) estimates that the crisis will cost the tourism sector at least USD 22 bn, and tourism sector will shrink by 25% in 2020-21. In India, it is expected that about 10 to 15% of jobs in tourism sector will shrink. Medium and small enterprises engaged in tourism and hospitality sector are likely to be severely impacted by the pandemic at least till the month of September as monsoon is gloomy period for the industry. Maharashtra is among the top states contributing to domestic tourism both in origin and destination. Therefore, focus needs to move to encouraging domestic tourism.
In order to maintain Maharashtra as popular tourist destination, state should consider promoting popular tourist destination in Maharashtra under ‘Incredible Maharashtra campaign,’ offer subsidy to tourism and hotel industry and in consultation with RBI designate tourism sector within the state as priority sector for lending by banks for a period of 2 years.
Real Estate Sector: Highlighting the plight of real estate sector Agrawal said that the outbreak of COVID 19, has significantly affected this sector. Residential sales are down by 70-80% as buyers have decided to not buy property till things become normal again. Shopping malls are expected to witness 10-12% erosion of rental income, reduced footfall and discretionary consumption spends in 2020-21. Cash flow crunch could widen in the residential sector, with limited sales in the coming months and debt servicing could be a challenge, especially for non-grade 1 developers.
Out of total 6.56 lakh unsold apartments across top 7 cities, around 12% or 81,300 are ready-to-move-in homes. The maximum ready stock is in the affordable segment priced below Rs 40 lakhs, followed by mid-segment homes. The luxury segments have the least ready stock. Mumbai Metropolitan Region (MMR) and Pune have the maximum ready affordable luxury units in stock, Agrawal added.
To save interest of home buyers as well as realtors and affiliated industries in crisis, CAMIT suggested that stamp duty on real-estate transactions in Mumbai, Pune and Nagpur should be reduced and the benefit of relief announced in state budget to all district centres of the state should be extended. It was also suggested that state should initiate to double the benefit under PMAY (subsidy amount as well as income limit) to cover more beneficiaries
Infrastructure Sector: State Government should introduce 5 year – Maharashtra Infrastructure Bonds offering secured interest rate at bank deposit rate + 1% to investors. The funds should be deployed in stalked Infra projects like Metro rail, Sewri-Nhavasheva link road and other high cost projects, to ensure flow of money in economy and pending can be completed in coming years.
Anil Parab and Balasaheb Thorat patiently heard and appreciated the suggestions submitted by CAMIT. They assured to work upon the suggestions for fast revival of state economy. Agrawal while expressing gratitude to both on behalf of business community of the state requested that relief measures should be balanced between all sectors based on distribution of population between Rural and Urban area addressing all segments of society in formulating policies after considering the distribution of population.
During the meeting, suggestions to revive logistic and cold storage chain, food processing industry, healthcare, chemicals, engineering power generation, automobile and spare-parts manufacturing and education were also submitted by Dipen Agrawal.