The Union Finance Ministry has ruled out any stimulus package for now even as COVID-19 cases continue to surge, forcing the state governments to impose localised restrictions hurting businesses and consumption sentiments. The ministry has hinted that interventions may continue for the vulnerable and impacted sections of the society as well as business sectors.
Maintaining that the government is watchful of the situation arising out of the second COVID wave, a finance ministry source told Business Today, "The government is in touch with the industry and taking its feedback on the emerging situation. As of now, a fiscal stimulus may not be required. A close watch is being kept though."
The official also said that entitlement-based packages for the needy could continue depending on the need. Amid the localised lockdowns in various states, including Maharashtra and Delhi, affecting livelihoods of people and leading to migration yet again, the government had extended the food grain entitlement scheme last week.
The Centre had announced that 5 kg food grain will be provided per person per month to 800 million beneficiaries in May and June.
"Interventions may continue for the vulnerable sections of the society as well as the industry as and when the need arises," the official added.
Even though the 'March Economic Review' released by Finance Ministry's Department of Economic Affairs claimed that India is "well prepared to combat the scourge of the virus" and "despite the surge in cases, the recovery in economy is resilient", key brokerages and rating agencies have downgraded their gross domestic product (GDP) growth projections for the country in the current financial year on account of the disruptions caused by the raging second wave of the pandemic.
While Nomura has downgraded India's GDP growth projection for the current financial year to 12.6 per cent from 13.5 per cent earlier, JP Morgan has lowered it to 11 per cent from 13 per cent earlier. UBS curtailed its growth forecast to 10 per cent from 11.5 per cent.
In order to hand-hold the economy ravaged by the national lockdown, Prime Minister Narendra Modi had announced a Rs 20 lakh crore economic stimulus package on May 12 last year.