This is under the Economic Recovery Strategy and Response Plan of the MoF and MoEA which will also include the RMA
The Ministry of Finance (MoF) and the Ministry of Economic Affairs (MoEA) have come up with a draft Economic Recovery Strategy and Response Plan that looks at a series of short term measures across various sectors of the economy to help the economy recover from the COVID-19 impact.
The MoEA Minister Loknath Sharma said that the economy is currently in the ICU and these short term measures aimed at the next two to three years is to help the economy to recover as soon as possible.
The MoF Minister Namgay Tshering said the MoF and MoEA will take their report to the Royal Monetary Authority (RMA) and also discuss monetary measures that will be required for the recovery and after that the final cabinet approval will be sought for implementation.
The Finance Minister said that one key recommendation of the Economic Recovery Strategy is recommending that the quarantine period for labourers be shortened from 21 days to 14 days with the third week being completed at the work station where the person can work in a containment mode.
He said as a part of this, the request is also to prioritize the 1,000 bedded temporary quarantine facilities and 2,500 bedded permanent quarantine facilities for workers who can work in the hydro projects, construction projects and in industries.
The two ministries feel that this will help both the construction and manufacturing industries which are large sectors of the economy and are also both hit hard due to shortage of workers.
He said that this request has also been placed to the COVID Technical Advisory Committee.
The minister said that hydro projects for example require around 3,000 workers and that would be prioritized.
Lyonpo Loknath Sharma said that the shortage of workers is also hampering industries to manufacture to their full potential. He gave the example of Ferro Silicone industries where the product is fetching very high prices abroad. Lyonpo said these factories need more workers to produce and export more.
Another major recommendation is allowing for a larger volume of import and export through the various trading points.
Here Lyonpo Loknath Sharma said that while import and export is happening from all points and goods are available, it is limited and controlled, and so on the import front it is leading to higher prices in the market.
Lyonpo said that such limitations on the trade for both import and export will suppress the economy.
Lyonpo Namgay Tshering pointed out that the MDP is already congested.
Lyonpo Loknath Sharma said that right now people importing goods have to bear delays and costs like demurrage charges. Lyonpo also pointed out that certain types of goods are not available. He said that the plan is to explore other spaces apart from the MDP and enhance imports so that it can lead to lower inflation.
On the export front the plan is to encourage mineral exports as mines including Dolomite cannot export to their full capacity. Lyonpo said that the exports of boulders also need to be enhanced. He said that industries will also be encouraged to enhance their production more to be able to export more.
For cottage and small industries things like e-commerce will be encouraged to allow them to take advantage of digital platforms to improve their business.
Lyonpo Loknath said the proposal is also to relax certain restrictions and open up business and entertainment centers.
Apart from the above, the MoF is also designing fiscal incentives like tax breaks and reductions to help businesses. A chunk of this is expected to be presented to the winter session of the Parliament as part of the Fiscal Incentive Bill.
Lyonpo Loknath said that the two ministries are also willing to reduce and remove regulatory requirements that may be hampering businesses. He said through the Private Sector Development Committee (PSDC) he has asked the BCCI to come up with some problems where businesses are getting stuck or delayed so that the government can take quick measures.
He said the ministries will try and remove such challenges as long as they do not have to go to Parliament.
Giving an example, he said that if a factory wants to expand then it can do so easily without having to go through a lot of regulations.
A major component of the recovery strategy will be some monetary measures by the RMA.
Here both the ministers said that for any economic recovery plan to be successful it should have a monetary element and this is where the RMA comes in.
The Finance Minister said that the two ministries will meet with the RMA over prudential regulations so that finance is available to businesses, it is available at an affordable cost and it is conveniently available.
He said the RMA has already announced many monetary measures but these are over the next one year and the discussions with RMA will be over what can be done in the next three to five years.
The minister said that at the same time the measures should be sustainable and not be a burden on the banks.
The MoEA minister said that one aspect that will be discussed with the RMA is on E-commerce payment platforms.
He said for an economy to recover it needs money and this is where RMA comes in. Lyonpo said there is also a proposal to reduce loan interest rates and another on making foreign exchange available to businesses.
The MoEA minister said that 21st Century Economic Roadmap is taking time as it is a vision for the longer term but the strategy that the MoF, MoEA and the RMA are coming up with is a short term plan for economic recovery.
He said it started when two weeks ago the two ministers asked their officials to work together and come up with a strategy. A draft was done and presented a few days ago and the ministers asked for some final changes to be made. Once this is done the two ministries will then have a meeting with the RMA.
Lyonpo Loknath said that the recovery strategy is not just limited to the two ministries but it will be a whole of the government strategy.
He said there are a lot of measures in the strategy and its also looks at FDI, value addition to agriculture and Tourism.
He said in tourism the recommendation would be to reduce the quarantine period from 21 to 14 days.
In an update, the National COVID-19 Taskforce reduced the 21-day quarantine to 14 days for those fully vaccinated and increased the business hours from 9 pm to 10 pm in low risk areas and from 8 pm to 9 pm in high risk areas.
It also allowed all indoor and outdoor sports.