COVID-19 crisis: Indian govt. looks at economic stimulus 2.0 as Lockdown 5.0 is likely
The Government of India might unleash another package of stimulus if a report is to be believed. The story of stimulus comes ahead of a possible Lockdown 5.0 or complete withdrawal of the lockdown.
According to the Hindustan Times, three officials familiar with such relief have shared that the package will include monetary, fiscal, and other measures to reboot the economy.
However, the government will study the impact of Rs. 20.97lakh crore which was recently announced, before announcing any further policy decisions. The previous set of the package announced was to promote Aatma Nirbhar Bharat (Self-reliant India).
The preceding series of announcements was made by the Union Finance Minister Nirmala Sitharaman and the RBI Governor in mid-May. The measures, however, have been criticized by the opposition party Congress. Critiques say the announcements failed to tame the falling economy amid COVID lockdown.
One of the officials has shared that the government, on a need basis, will inject measures to boost demand and enhance supplies. The government is studying the impact and identifying gaps that policies need to take a relook. Channels with stakeholders on further discussion are also open.
Reports suggest that despite a slew of announcements, demand in the market is lagging. One key area of concern is the low demand for loans despite banks’ eagerness to reach out to borrowers.
Analysts believe the borrowers are borrowing money from banks as they fear the demand might not pick in the coming months.
While stimulus has been announced since March, when the lockdown was first announced, the economy appears tardy.
For the policymakers, another concern would be a sharp decline in GST collection, as hundreds of businesses were affected by the lockdown.
India has reported high spike COVID cases despite having imposed a strict lockdown. The number of COVID positive cases is in the top ten, along with the US, Brazil, and Russia.
Health experts believe cases in India are likely to peak in June or July.
Major cities like Mumbai, Chennai, and Delhi remained partially locked. India’s total cases are now 1, 73,763, with a steep increase in daily numbers.
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