Finance Ministry and RBI in discussions over economic stimulus, likely to launch $20b-plus package

Last updated on February 9th, 2023 at 12:46 pm

Indian government, which earlier this week announced a 21 day lockdown, is contemplating over resolving issues pertaining to the country’s dwindling economic health and other challenges which emerged amid the shutdown. The finance ministry has urged Reserve Bank of India to aid people with certain relief measure stuck in their homes due to outbreak of Covid-19 pandemic.

On Tuesday, Department of financial services secretary Debashish Panda wrote to the country’s central bank suggesting introduction of a moratorium for a few months on the payment of equated monthly installments (EMIs), interest and loan repayments and ease the classification of nonperforming assets (NPAs). In his letter Panda also highlighted the need for maintaining liquidity in the economy.

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The highly contagious coronavirus has brought business to a stand still, crippling the country’s financial system. As per the reports, the government, which is in discussions with RBI and the finance ministry, is expected to announced an economic package over the next two-three days. As per the sources who spoke to the Reuters, the package could be more than Rs 1.5 trillion ($19.6 billion), while another senior official said that the stimulus plan could be as huge as Rs 2.3 trillion, but final numbers are yet to be finalised.

The government is planning on aiding people by putting money directly into the accounts of over 100 million poor and to financially support businesses hit the hardest by the national lockdown.

On Tuesday, Finance Minister Nirmala Sitharaman announced that due to the ongoing crisis, the timelines for filing taxes and raising default thresholds for invoking bankruptcy proceedings have been relaxed.