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Is fiscal stimulus on cards by Diwali? FM Sitharaman has this to say

Amid the economic slowdown owing to the ongoing coronavirus crisis, expectations are high about the next fiscal stimulus by the government

twitter-logoBusinessToday.In | September 30, 2020 | Updated 14:17 IST
Is fiscal stimulus on cards by Diwali? FM Sitharaman has this to say
Finance Minister Nirmala Sitharaman

Amid the economic slowdown owing to the ongoing coronavirus crisis, expectations are high about the next fiscal stimulus by the government. The stimulus is expected to provide a much needed push to the battered economy. Sharing her thoughts on the issue, Finance Minister Nirmala Sitharaman said that the government is looking at ways in which it could provide some support to the economy.

"I have said that I have kept my mind open about it," Sitharaman told The Economic Times. On constraints related to fiscal stimulus amid ballooning fiscal deficit, Sitharaman said the government has always taken measures to address the problems of the companies and businesses. "We have not really allowed that to stop us from doing what is necessary for companies or for the various borrowers in the banks," she said.

On expected economic recovery, Sitharaman said that the ongoing quarter is actually seeing revival as against what happened in the first quarter. "It will be too early for me, based on this, to conclude as to how the year will end. We'll have to wait and watch," she also said.

On the probability of fiscal stimulus by Diwali, Sitharaman said, "If I can answer that, I will answer in detail, but I'm not going to be able to answer that now."

The country's economy contracted by a record 23.9 per cent in the first quarter of the current fiscal. In May, the government had announced a Rs 20.97 lakh crore economic package, which also included liquidity support from the RBI.

The stimulus measures "did not increase consumption spending of lower income people as the government was not willing to put money in the hands of the low income population," Nobel Laureate Abhijit Banerjee had recently said.

Also read: Banks catalysts for economic revival, should focus on welfare: Nirmala Sitharaman

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