After several rounds of discussion, the government has almost finalized the next stimulus package, the source said, adding that the size of the stimulus could be much smaller than the previously announced amount of Rs 20 lakh crore. The government may announce the reintroduction of Pradhan Mantri Rojgar Protsahan Yojna in an expanded form, they said. Under this scheme, the government can grant a subsidy of 10 percent on the FP contribution to new employees and the employer, both.
Another source stated that the next package could announce Part 2 of the Emergency Line of Credit Scheme. Under this scheme, the government is likely to provide unsecured credit. Similarly, some special incentives for specific sectors can be part of this package, added the source.
This would be the government’s third stimulus package after the Covid-19 outbreak.
On Wednesday, the government approved a production-linked incentive (PLI) scheme for ten key sectors, including telecommunications, automobiles and pharmaceuticals, bringing the total outlay for such incentives to nearly Rs 2 lakh crore over a five-year period. . The plan is intended to help boost domestic manufacturing, reduce imports and create jobs while the government works to boost economic growth. The financial outlay for the new scheme will be Rs 1,45,980 crore.
The Cabinet had also decided to extend the financing plan for the viability deficit to the social infrastructure sectors. Currently, the scheme is only available for projects related to economic infrastructure.
The PLI scheme, Sitharaman had said, would provide stimulus to critical sunrise sectors by securing needed government support, as well as creating jobs and linking India to the global value chain.
An RBI official said Wednesday that India’s GDP is likely to contract 8.6 percent for the July-September period, meaning the country would enter a recession for the first time in history in the first half. of this fiscal year with two successive quarters of negative growth due to the coronavirus pandemic.
Researchers have used the “immediate forecast” method to arrive at estimates before the data is officially released, and their views in an article in the RBI’s monthly bulletin published Wednesday do not constitute the views of the central bank.
The lockdowns induced by the pandemic had caused a sharp contraction of 23.9% of GDP for the April-June quarter compared to the same period of the previous year.
The RBI estimated that the economy would contract 9.5 percent for the entire fiscal year. “India has entered a technical recession in the first half of 2020-21 for the first time in its history and the second quarter of 2020-21 is likely to see the second consecutive quarter of GDP contraction,” according to the article titled ‘Index of economic activity ‘, written by Pankaj Kumar of the Department of Monetary Policy.
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