Shutterstock.comIndustry body PHDCCI on Friday suggested the government to issue special COVID bonds for raising funds to provide stimulus support to push economic growth. PHD Chamber of Commerce and Industry said the coronavirus-induced restrictions in the country have created a difficult time for the trade and industry, and the government has to step up with proactive as well as calibrated measures to help them.
“To mobilise the fiscal resources of such stimulus support to the economy, the issuance of special COVID bonds could become an appropriate substitute to the market borrowings by the government,” it said.
There is a need for effective fiscal measures such as reduction in the GST rates to create demand in the economy along with the Direct Benefit Transfers for the urban and rural poor, in-kind transfers, front-loading of infrastructure investments, among others, the chamber added.
“Various governments, banks and financial institutions around the world have often adopted the innovative mechanism of issuing special bonds to raise resources for a speedy recovery in difficult situations,” PHDCCI noted.
Such special bonds involve relatively less inflation risk, limit the crowding-out of private investments from other sectors of the economy and form a source of tax-free income for bondholders, it added.
In a separate statement, PHDCCI president Sanjay Aggarwal said temporary patent waiver in the World Trade Organisation (WTO) for the COVID-19 vaccine and other related products will enhance the transfer of knowledge and know-how for scaling up vaccine production worldwide.
The supply of raw materials for the vaccine will ramp up the production and resolve the current vaccine shortage, he added.