A day after the RBI’s economic contraction forecast in 2020-2021, Finance Minister Nirmala Sitharaman said Saturday that future fiscal policy measures to stimulate the economy would depend on how the COVID-19 pandemic unfolds. .
The government has already announced an economic package of Rs 20.97 lakh crore, which includes liquidity measures from Reserve Bank Rs 8.01 lakh crore in cash until May 17.
Ms. Sitharaman said it would be difficult to make a “realistic assessment” of economic growth at the moment because there is no clarity as to when the pandemic would end.
“I am not closing the door at all. I want to continue to get contributions from the industry, implement what we have announced and depending on how things go, we have to react accordingly. that 2 months this year, we have 10 months left, “said Ms. Sitharaman in a conversation with BJP leader Nalin Kohli.
The Reserve Bank said on Friday that the impact of COVID-19 was more severe than expected and that GDP growth over the 2020-2021 period would likely remain in negative territory. It predicted a resumption of growth stimuli from the second half (October-March) of 2020-2021.
Last week, the minister announced a five-tranche economic package, which included support of crore Rs 3.70 lakh for MSMEs, Rs 75,000 crore for NBFCs and Rs 90,000 crore for electricity, grain distribution companies free food for migrant workers, an increased allowance for MGNREGS, the relief tax for certain sections and Rs 15,000 crore allocated to the health sector to cope with the pandemic.
The package was produced in consultation with economists, academics, former bankers, former finance ministry and industry officials, said Sitharaman, adding that the idea was to make more liquidity available in the economy and boost demand, said Ms. Sitharaman.
“The package was designed keeping in mind that we are facing an exceptional situation and therefore that the contraction is going to be as big or as big, we did not have the luxury of having data to guess them and estimate them. However, the spirit of this thought has been kept in mind that we must now consider a complete contraction and if we are to stimulate the economy with this in mind what we must do ” she said.
Ms. Sitharaman said the approach has been to follow this path of stimulating the economy through businesses, institutions, businesses and businesses all receiving assistance from banks or formulations by through which companies restart.
“I am sure Indian entrepreneurs will also come out after testing the waters after the foreclosure … We have proposed measures that will increase the liquidity of the economy, if there is more liquidity in the economy, the people will get money in their hands and it will kick-start the economy, bring more demand, “she said.
Ms. Sitharaman also said that the government is working to further speed up FDI approvals by government departments, providing political security and easing the compliance burden for businesses.
COVID-19, the disease caused by the coronavirus, claimed the lives of 3,720 people in India when the number of infected people exceeded 1.25 lakh.