India's economy is facing an unprecedented crisis in the wake of coronavirus pandemic, which has prompted the government to come up with a series of economic stimulus packages since the nation-wide lockdown was imposed on March 25. Economic stimulus package is announced by a government at a time when there's a deep slowdown or a nation is facing recession. India has been under lockdown, which forced industries and business houses to shut all kinds activities, bringing the economic growth engine to a grinding halt.
The government last month came up with an economic stimulus package worth Rs 1.7 lakh crore for millions of poor, farmers, women and senior citizens. That was followed by easing of monetary policy by the Reserve Bank of India (RBI), giving much-needed relaxations to businesses.
The lockdown has not only caused immense problems for the common man but has led to shutting down of small businesses, job losses across the industry, stopping of air and rail travel and has restricted movement of people and goods.
Several economists have already said that India may have entered the recession as 40-day lockdown has caused a major downfall in consumption activity, a major driver of economic growth. The lockdown has also led to fears of banks' non-performing assets rising manifold in the months to come.
As per a Reuters poll, for the first time since the 1990s, India's gross domestic product is expected to shrink. The government is now considering another second dose of relief measures for the common man and a stimulus package for India Inc, which could be significant considering losses suffered in the lockdown period. Rating agency Icra has also estimated the country's GDP might contract by as much as 20 per cent in the June quarter and by 2 per cent in FY21.
In an online conversation with Congress leader Rahul Gandhi, Rajiv Bajaj was also critical of India's approach to look at western nations such as the US, UK and Italy, instead of closer home-eastwards countries such as Japan, and South Korea to tackle the COVID-19 pandemic
Latest job loss survey and national accounts statistics point to the need for strengthening PDS supply and cash transfers to reach more people, assisting self-employed/micro-enterprises, additional allocation for MGNREGS and a job scheme for urban areas
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Moody's has downgraded the long-term local and foreign currency deposit ratings of State Bank of India and HDFC Bank to Baa3 from Baa2, and the long-term issuer rating of EXIM India to Baa3 from Baa2
Lockdowns imposed by wealthy nations to slow the spread of the novel coronavirus, and the jolt those restrictions have delivered to their economies, are severing a vital lifeline for many often vulnerable people around the world
RBI data shows excess liquidity is lying idle, parked in its own reverse repo account, and burdening it with higher interest payouts. This could be tapped and channelised for additional fiscal spending to stimulate growth through government bonds