Finance Minister Nirmala Sitharaman announced the first tranche of measures under the Rs 20 lakh crore stimulus package. Maruti Suzuki has said that it will lay off its staff despite strained financials. Veteran banker Uday Kotak likened the coronavirus lockdown to a Chakravyuh - easy to get into, difficult to exit.
The Rs 3 lakh crore collateral free loans to MSMEs would be disbursed by banks with a 100 per cent government guarantee. Since there would be a moratorium for 12 months, there will be no default in 2020-21.
What ails the economy is lack of demand. There's only one factor that can revive the economy instantly - consumption. Post-lockdown, it's critical to stimulate demand and drive consumption in the economy. Can the stimulus do that?
Start to the new fiscal has not been very good for Maruti Suzuki, with the company registering zero sales in the first month due to lockdown.
Veteran banker Uday Kotak talked about handling the exit of the lockdown in a gradual and calibrated manner. "It will have economic costs while the country deals with the virus."
Around Rs 2,000 crore will be earmarked for the purchase of ventilators, Rs 1,000 crore will be used for care of migrant labourers and Rs 100 crore will be given for vaccine development.