NEW DELHI: Days after Finance Minister Nirmala Sitharaman said the government remains open to the idea of another round of fiscal stimulus to help revive the pandemic-hit economy, a senior Finance Ministry official said the Wednesday that another aid package is in the works.
Economic Affairs Secretary Tarun Bajaj said the finance minister asked officials to explore another stimulus package and that the ministry is working on it.
“The government has received suggestions from various ministries and sectors on the necessary measures. As we prepare for next year’s budget, we are also looking at this year’s expenditures and the requirements of various ministries, “Bajaj said at a virtual conference hosted by the Confederation of Indian Industry.
“We have been pushing government departments to make capital expenditures to create a multiplier effect on the economy. We will also allocate more money for capital expenditures where needed in our revised estimates.”
Speaking at the virtual launch of the autobiography of the chairman of the 15th finance committee, NK Singh, Sitharaman had said that he had not closed the option of another stimulus package if it turns out to be. “Every time we announce one, it has been after a great deal of consideration of the input that has come from various different sectors of society. Then we sit down and resolve it within the ministry and the prime minister’s office and then we take a final call. I have not closed the option of proposing one more stimulus, “said Sitharaman.
On October 12, the Finance Minister announced a stimulus package worth ₹Rs 46,675 crore, which includes incentives for central government employees to spend more on consumer durables and higher capital spending for both the Center and the states.
Credit rating agency Moody’s said last week that the measures worth 0.2% of GDP will only provide limited support to growth and highlight the government’s “very weak fiscal position.”
Last week, in an interview with Mint, spending secretary TV Somanathan had said that while nothing is planned yet, another stimulus cannot be ruled out. “For now, I don’t think there is anything else planned. But in real life nothing can be ruled out. The Finance Minister has always said that we will continue to monitor the situation and react periodically when the situation requires it. So I can’t give you a compromise in any way. “
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