In a feat to revamp the severely hit economy of the country panicked by the coronavirus shockwave, Prime Minister Narendra Modi has announced a relief of $20 Trillion ($266 Billion) to be provided in fiscal as well monetary measures.
The Prime Minister has also announced the extension of the nationwide lockdown, the particulars of which will be kept in front of the population before 18th of May. This measure has been taken because already more than 70,000 out of the 1.3 billion population of the country has been affected by the COVID-19 disease and is most likely to supersede the number of affected cases in China, the epicentre of the coronavirus outbreak.
The relief money that has been announced has been estimated to be 10 percent of the overall GDP of the nation and is primarily directed towards the sector of the business ecosystem that have suffered a prolonged lockdown extending more than 1.5 months.
Modi expressed that details of the new package including the reforms of land and labour markets, will be released within the next few days. He said, “The package will also focus on land, labour, liquidity and laws. It will cater to various sections including cottage industry, medium and small enterprises, labourers, middle class, and industries, among others.”
Economists have also expressed that the new package by the government included the allocation for March and also the liquidity measures announced by the central bank worth 6.5 trillion rupees. “Headline announcement looks positive. It would include around 6.5 trillion rupees already done by RBI (Reserve Bank of India) and the first package. So - additional is 13.5 trillion rupees,” said Sandip Sabharwal, a Mumbai-based fund manager.
Some commentators said that it was too early to say how effective the package would prove to be. “Very often, when the government has made these huge, very big announcements ... the figures have often been fudged,” Yogendra Yadav, founder of the opposition party Swaraj India, told the media.
Central banks and Governments around the world have also released substantial amount of funds in order to revamp the badly stricken world economy.
“India’s response has so far been tepid compared to other key nations and thus the catch-up is welcome and is also the need of the hour,” said Madhavi Arora, lead economist at Edelweiss FX and Rates.
“It needs to be seen how much will be in the form of direct budgetary support to gauge the immediate fiscal hit and the consequent funding sources”, she added.
