Details of package to be announced by Nirmala Sitaraman
NEW DELHI: The Prime Minister Narendra Modi, who appeared on TV Tuesday night to address Indians to brief on the new Lockdown, gave a pleasant surprise to the people by announcing a humungous COVID revival package of Rs20 trillion (Rs20 lakh crore) that clubs previous government package and the Central Bank measures that helped inject liquidity into the system.
Modi said the details of the package that measures up to 10 per cent of the country’s GDP and two-thirds of the current year’s budget will be detailed by the Finance Minister Nirmala Sitharaman from Wednesday (May 13) onwards. More importantly, the market is eagerly waiting to learn how the government is going to raise the funds for such a huge financial initiative and what role RBI will play in the whole game.
Kerala FM waiting fingers crossed
Responding to the development, the Kerala Finance Minister, Dr Thomas Isaac said he was waiting to get more details as regards how the new package would help the states that have been bearing the real brunt of the COVID 19 pandemic financially.
Kerala has been driven to a tight spot with the government literally struggling to find the wherewithal to pay salary to its staff.
Recently, the Central Government has announced that it would borrow an additional Rs4.2 lakh crore over and above the Rs7.8 lakh crore it has already announced in the budget taking the potential borrowing to Rs12 trillion.
The new stimulus package, Modi said, would pivot on investments in the area of land, micro, small and medium enterprises and the salaried class. The PM said the government will undertake reforms to encourage businesses and simplify taxes in order to foster a strong financial system.
Earlier in March, the government had announced Rs1.7-trillion package, whereas the Reserve Bank embarked on liquidity measures amounting to around Rs3.4 trillion.
Stating that the government’s new pledge will hinge on key pillars – economy, infrastructure, demography and demand, Modi added that this time the economy is well set for a quantum change and not incremental change.
He said the COVID should be viewed in terms of the opportunities it has offered to the country. He said the country has to now live with corona virus, “but we will not allow it to fail the country.”
“The 21s century has taught us to see dreams and at the same time we have a lot of responsibilities too to take on. There’s only one path to achieve this: a self-dependent India,” he reminded.