Former Finance Secretary Subhash Chandra Garg has said the unavailability of data is the main reason why the government has not been able to announce a stimulus package for coronavirus stricken businesses, including MSMEs.

Garg, in a blog post, said there is an urgent need to assign a unique ID to each business as it would help in collecting vital economic performance data and facilitate linking of all bank accounts of a business to that ID. “Principal reason for the inability of the Government to announce any survival and revival package, even for MSMEs, is the unavailability of business, value-added, the number of labours employed, loss of output and profit data. 

There is an urgent need to establish the system of unique business ID and link significant business data with this,” he said. 

The Government on March 26 had announced a Rs 1.7 lakh crore stimulus that included free foodgrain and cooking gas to poor for three months. It also had cash doles to vulnerable class including women and poor. The Finance Ministry is working on a second relief package for the Indian economy hit hard by the COVID-19 outbreak and the 40-day nationwide lockdown imposed to curb the contagion. The former Finance Secretary added the economic lockdown ordered by the government to save lives has jolted the business loan portfolio of banks. 

“Many businesses in travel, tourism, hospitality, construction, transportation, retail, entertainment, sports will fail. This can double their non-performing loans as a number of shuttered businesses and disrupted businesses will fail and suffer profitability shocks,” he noted. Garg suggested that it is time for the RBI to think of providing credit to investment grade businesses directly. “RBI can start buying investment-grade corporate bonds and mortgage-backed securities,” he said adding that much of the Targeted Long-Term Repo Operations (TLTRO) can be much better done directly by RBI, instead of doing it in a roundabout way of going through the banks.