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Finance Minister Nirmala Sitharaman is expected to announce an economic stimulus package worth Rs 3 lakh crore later this week, according to a news report.
The amount of his upcoming announcements could add up to Rs 3 trillion or more, Business Standard reported Tuesday. Expenditure on all initiatives together is expected to be similar to that offered by the G-20 countries in terms of the percentage of GDP.
The central government has been considering a measured approach to deal with the blockade situation to curb the spread of Covid-19 amid mounting pressure from industries. It recently announced its plans to borrow 54 percent or slightly more of Rs 4 lakh crore more than budgeted estimates of Rs 7.8 lakh crore.
According to a government official, the “next set of announcements” would be massive compared to the 1.7 rupee lakh rupee package announced by the Finance Minister.
The Confederation of Indian Industry (IIC) in a report released in April said that India’s GDP is likely to range from a 0.9 percent decline to 1.5 percent growth in the current financial year, with the economy experiencing a “turbulent” phase caused by coronavirus-induced blockade
In the reference scenario, the Gross Domestic Product (GDP) is expected to grow to just 0.6 percent on an annual basis, as economic activity is expected to remain limited due to continued restrictions on the free movement of goods and people beyond the closing period.
This will lead to disruption of supply chains, slow recovery in investment activity, short-term labor shortages and muted consumer demand due to reduced household incomes, the agency said. the industry.
In the optimistic scenario, which anticipates a faster recovery after the closing period, GDP is forecast to post 1.5 percent growth at best.
In the event of a longer outbreak, where restrictions in existing hot spot regions are extended, while new regions are identified as ‘hot spots’ leading to intermittent stops and starts in economic activity, GDP is likely decrease by -0.9 per cent.
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