The direct fiscal hit after the announcement of three stimulus packages announced so far amounts to only 0.6 per cent or Rs 1.29 lakh crore of India's total Gross Domestic Product, an SBI Ecowrap report said. Of total Rs 3.16 lakh crore worth announcements made yesterday, the Centre's cash outlay will be around Rs 14,500-14,750 crore, rest is in the forms of loans and liquidity, leaving fiscal deficit hit of 0.07 per cent of the GDP.
Lower revenues and higher expenditure in the wake of COVID-19 pandemic will leave an overall fiscal deficit dent of Rs 16 lakh crore (8 per cent of revised estimates of GDP) in FY21, it added.
The government on Thursday announced measures to ensure food security for migrants, extended affordable housing scheme for urban poor and special credit facility for street vendors. With this, the total package announced so far stands at Rs 16.45 lakh crore, implying residual package of Rs 3.54 lakh crore is left of the total Rs 20 lakh crore package announced, provided the earlier measures announced by the RBI are also included.
The report said Finance Minister Nirmala Sitharaman's second tranche of announcements will give support to the needy by giving access to food and credit. "The recent crisis has shown how important it is for a huge country like India to have an infrastructure, which promotes interoperability between the States and Centre. The mission mode implementation of One Nation One Ration Card is a step in the right direction. So is making available the portability of welfare benefits for migrant workers and those having no ration card," it said.
SBI said changes in labour laws that were being mulled over in Parliament, if implemented properly, could bring positive changes in the status of the labourers.
All states/UTs are expected to implement the One Nation One Ration Card scheme by March 2021. "The technological architecture has to be put in place quickly in more than 5.27 lakhs Fair Price Shops (FPSs) (2018 data) operational across the country," the report said.
Through the banking channel, the government also announced financial support for the Shishu Loan Holders under MUDRA Scheme, street vendors and farmers. "Easy access to credit for street vendors is urgently required as they have seen the maximum impact of lockdown. Top ten states account for around 35 lakh street vendors with Uttar Pradesh taking the lead with 7.8 lakh vendors followed by West Bengal at 5.5 lakh vendors," it said.
The report said the Credit Linked Subsidy Scheme and Affordable Rental Housing scheme will also give a push to housing, thus increasing demand for construction of raw materials.
Furthermore, plans worth Rs 6,000 crore that'll be approved under the Compensatory Afforestation Management & Planning Authority (CAMPA) will support job opportunities. NABARD will also extend additional refinance support of Rs 30,000 crore for crop loan requirement of Rural Co-op Banks & RRBs. On 17 April, the RBI had also given a line of credit support to NABARD of Rs 25,000 crore. "We expect RBI might give another Rs 30,000 crore liquidity support to NABARD to ease the stress and cost of borrowing," the report said.