PM Modi Reviews Coronavirus Impact On Indian Economy, Second Stimulus Package In Consideration

Prime Minister Narendra Modi on Thursday assessed the novel coronavirus’ impact on Indian economy and the possibility of a second stimulus package to boost sectors hit hard by the pandemic.

Several multilateral agencies, including the World Bank and the International Monetary Fund, have drastically cut their India GDP growth forecasts for 2020-21 after economic activity in the country halted due to the 40-day coronavirus lockdown.

While the World Bank expects India to grow at 1.5-2.8 percent in 2020, the IMF predicts a 1.9 percent expansion. The global economy, meanwhile, is in the throes of the worst recession since the Great Depression in 1930s, IMF said.

The virus has so far infected 12,380 people in India and the death toll is at 414.

State Of The Economy

During his meeting with Finance Minister Nirmala Sitharaman Thursday, PM Modi held detailed discussions on the state of the economy, sources said, adding that resource mobilisation for taking on future challenges was also highlighted.

The government has constituted an empowered group—headed by Economic Affairs Secretary Atanu Chakraborty—to suggest measures which can bring the economy back on track quickly post the lockdown. It has also been asked to work on relief and welfare measures for various sectors of the economy as well as for the poor and needy.

In his address to the nation on Tuesday, PM Modi had expressed concern over the problems being faced by the poor, daily wage workers and farmers. "The government has made every possible effort to help them through Pradhan Mantri Gareeb Kalyan Yojana. Their interests have also been taken care of while making the new guidelines," he had said.

To ease the pain and misery, the finance minister last month announced a Rs 1.7 lakh crore stimulus that included free foodgrains and cooking gas to the poor for three months, and cash doles to women and poor senior citizens.

Saving On Costs

The government has put in place restrictions on expenditure in a bid to save resources. Funds are being diverted towards the fight against Covid-19. Besides, the Union Cabinet has approved a 30 percent cut in salaries and allowances of Members of Parliament for one year.

The President of India, Vice President and state governors have voluntarily decided to take a pay cut as a gesture towards concerted efforts to contain the pandemic.

Also Read: Tracking India’s Steps to Contain Economic Fallout of the Virus

The government, at the same time, has decided to suspend Members of Parliament Local Area Development Scheme and funds would be directed towards improving medical infrastructure. A Member of Parliament gets Rs 5 crore every year as part of the MPLADS scheme.